If you want to apply for a mortgage after bankruptcy, you will have to wait around two years for most lenders to consider your application. It is a great idea to use these two years to work at improving your credit rating to make you a more attractive prospect to lenders when the time comes.
There are a few simple steps to making sure your credit report and credit rating are in good shape. Firstly, after your bankruptcy discharge date, obtain a copy of your credit report and go through it with a fine toothed comb. You may well find that accounts are still showing as open and in arrears when in fact they were included in your bankruptcy and should be showing as such. If you find this is the case on your credit report, contact the credit agencies and ask them to correct these errors as they can be detrimental to you in the future. This may take a few calls, but it is vital to make sure the information on your credit report is accurate as it will affect any future decisions that are made with regards to future lending.
The next thing to address is improving your credit rating. Now this will take time, but it is possible to make a big difference in the two years following your bankruptcy discharge date. One of the best ways to do this is to get a credit card. This may seem a strange suggestion seeing as you are just out of bankruptcy, and may bring to question whether you will be able to get a credit card in your situation. There are many companies that specialise in high-risk credit cards, and they do this by charging incredibly high interest rates. The key to making this kind of credit card work for you is to use it maybe a couple of times a month on affordable purchases, meaning things that you have the money for, then pay it off in full at the end of the month. If you don’t feel you will be able to do this then do not even consider getting this type of credit card and trying this method, you can only make this work to your advantage if you have the discipline to only make small purchases and pay it off in full every month. By following this pattern, you will show that you are a good debtor, you can manage your debts and are capable of making regular payments. This will increase your credit rating steadily over the course of a few months, and if you find you are able to stick to this plan, you can apply for a regular credit card at the end of the first year, if you are accepted then you are well on the way to repairing your credit rating. Repeat this process with your regular credit card to once again prove you are a responsible borrower and can maintain regular payments with ease.
At the end of the two year waiting period, it is advisable to once again request a copy of your credit report to make sure everything is in order. If you are happy with what you see then you are in a good position to consider applying for a mortgage.