Why You can Get Credit Immediately after Bankruptcy?
Is there any reason why you can get credit immediately after bankruptcy? Surprisingly, being approved for some credit following insolvency is not impossible.
If you were a creditor, would you approve a credit card application for someone that just went bankrupt? Most people would never even consider loaning money to someone that just went through insolvency, though creditors tend to see this situation a bit differently than everyone else. There is a reason as to why you can get credit immediately after bankruptcy, and it’s called assurance.
Those creditors that offer you numerous credit card offers knowing that you have just gone through bankruptcy aren’t crazy. In fact, they are rather crafty when you think about it. They know that you need to build your credit up once again. They also know that you cannot file another bankruptcy claim for seven years following your first claim. While these reasons are good enough, there is one more thing that creditors know all too well…they can offer you an obscene interest rate and you are going to take it.
If you are hoping to get a credit card at a great rate following Chapter 7 or 13, you are in for a bit of a surprise. As previously mentioned, the number one reason why you can get credit immediately after bankruptcy is that you will be paying interest through the nose. Still, this is a necessary evil if you want to improve upon that credit score. If you are considering a home loan, attaining credit may be another story altogether. While some lenders will consider those with a poor score when it comes to home loans, most will not. Since a home loan must be paid off over the span of thirty, or so, years, these lenders know that you may not be able to get back on your financial feet through the life of that loan.
So, what can you do if you are in this type of position? Well, accept offers for those high interest credit cards (even though it may hurt), and pay them on time every month. Over the next ten years, work to rebuild your score. Then, you can try to apply for a mortgage…hopefully your score will be better allowing you to gain approval.
Though the reasons as to why you can get credit immediately after bankruptcy listed in this article may be helpful, they are not to be considered legal advice. In order to fully understand this complex situation, it is best to contact a bankruptcy attorney.