How to Rebuild Credit to Buy a Home After Bankruptcy

Most people dream of owning a home. Unfortunately, a recent bankruptcy can put this dream on hold so you might have to rent a property until your credit improves. Still, it is possible to rebuild your credit after a bankruptcy. You'll need to recognize habits and mistakes that led to a bankruptcy and resolve to modify these habits. A bankruptcy falls off your credit report in ten years. Fortunately, you don't have to wait that long to purchase a home.

Instructions

1

Check your credit report. A bankruptcy stops harassing phone calls from creditors and you're no longer obligated to repay those debts. After the discharge, get a copy of your credit report from Annualcreditreport.com. Review the report thoroughly to check for accuracy and to ensure that your creditors were included in the bankruptcy.

2

Look into installment loans. Apply for a vehicle loan or student loan to begin restoring your credit rating. Anticipate a higher interest rate.

3

Discuss secured credit card options with your bank. Save money for a security deposit (about $500), and then apply for a secured or prepaid credit card with your local bank.

4

Keep your debts low. Pay off your balances every month to maintain a low debt-to-income ratio.

5

Avoid skipping payments. Sending late or missing payments causes further damage. Mail or submit online payments several days before the due date.

6

Ask creditors to report your good payment history. Some creditors don't regularly report to the credit bureaus. Contact your new lenders to see how often they report to the three major credit bureaus. Request regular updates to help improve your credit.