| Although bankruptcy can stay on your credit record for seven to ten years, in about two years you can probably rebuild your credit to a point that will get you approved for just about any loan, even a home mortgage. Most creditors look for steady employment and a history, after bankruptcy, of making and paying for purchases on credit. Many creditors disregard bankruptcy entirely after four or five years. In the long run, bankruptcy may actually improve your ability to obtain future credit. One of the most important items on your credit report is your debt-to-income ratio and, after bankruptcy that number usually improves substantially because your debts are largely eliminated. Also, without the burden of debts you’ll be able to save for a down payment on property which always improves your standing with lenders. You also may not realize you will be eligible for a Federally secured FHA Loan just two years after bankruptcy. Create a Budget- The first step to rebuilding your credit is to stay within a budget. Controlling spending and saving money are essential after bankruptcy. Think about changes you can make to your spending habits to save even just a few dollars a week. Setting and achieving small goals can be very inspiring and lead you to much greater saving than you thought possible. Most people can usually cut at least 5% from their spending by simply avoiding impulse buying, paying cash for things, and preparing more meals at home. Review Your Credit Report- Often credit reporting agencies will inadvertently put negative entries on your credit report that don’t belong there. With so many files to manage there are bound to be mistakes. It’s a good idea to periodically review your credit report to ensure all entries are accurate. If there are incorrect entries, you may challenge those items. The credit reporting agency will then correct your file, if they can’t verify the item. To contact the credit reporting agencies you can use the following links: www.equifax.com www.experian.com www.transunion.com
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