Reestablishing Credit After Bankruptcy To Qualify For A Mortgage

Reestablishing Credit After Bankruptcy For Mortgage Loan Approval

Gustan Cho Associates are mortgage brokers licensed in 48 states

This blog will cover reestablishing credit after bankruptcy for mortgage loan approval. Government and conventional loans require a mandatory waiting period after the bankruptcy discharge. However, just waiting out the waiting period requirements does not mean you are guaranteed a mortgage loan approval. To get an approve/eligible per automated underwriting system approval, HUD, VA, USDA, Fannie Mae, and Freddie Mac require reestablishing credit after bankruptcy. Not only is reestablishing credit after bankruptcy expected, but you cannot have any late payments after bankruptcy.

The easiest and fastest way of Reestablishing Credit After Bankruptcy to prepare for a mortgage is by getting three to five secured credit cards with at least a $500 credit limit on each card. Each secured credit card can boost credit scores between 20 to 50 points. Reestablishing credit after bankruptcy takes time. Expect to take anywhere between 45 to 90 days when reestablishing credit after bankruptcy with secured credit cards.

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When Should I Start Reestablishing Credit After Bankruptcy?

When should you get the secured credit cards?  The answer is as soon as possible from the bankruptcy discharge. Each secured credit card should boost consumer credit scores by 20 to 50 points. The consumer’s credit profile will strengthen as the secured credit card ages. You should get three to five secured credit cards with at least a $500 credit limit.

You should also get one to three credit rebuilder accounts for maximum credit score optimization. Gustan Cho Associates has helped thousands of homebuyers get credit scores to 700 FICO less than one year after their bankruptcy discharge date. After six to twelve months of timely payments using your secured credit cards and paying on time, the secured credit card company will increase the credit limit without asking for an additional deposit from the cardholder.
When should I start Start Reestablishing Credit After Bankruptcy

How To Get 700 FICO In Less Than One Year After Bankruptcy Discharge

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By taking our advice, many clients at Gustan Cho Associates have credit scores over 700 FICO less than a year after their bankruptcy discharge date. Gustan Cho Associates will guide our clients in Reestablishing Credit After Bankruptcy to qualify for a home mortgage.

There are mandatory waiting period requirements after bankruptcy to qualify for a mortgage after bankruptcy. The waiting period requirements depend on the loan program we will cover in this blog. Gustan Cho Associates offers non-QM loans one day out of bankruptcy. We will also cover the basic guidelines of alternative finance home mortgages for homebuyers who want to purchase a home and qualify for a mortgage before the mandatory waiting period.

The Power of Secured Credit Cards For Reestablishing Credit After Bankruptcy

Secured credit cards are like unsecured credit cards. The only difference between secured versus unsecured cards is that secured credit cards require a deposit. For example, a consumer deposits $500 to a secured credit card company.

The credit card provider will issue a secured credit card with a credit for $500. The card provider will report all payment history to the three credit bureaus. Late payments will be reported as late payments on the credit bureaus.

How Secured Credit Cards Rebuild Consumer Credit Profile

Secured credit cards are the most powerful tool for Reestablishing Credit After Bankruptcy. Each secured credit card should boost a consumer credit score by at least 20 to 50 points. The cardholder’s credit profile will also strengthen as the secured card ages. Secured credit card providers will increase credit limits for cardholders who are timely on their payments after six to twelve months.

According to Wendy of Gustan Cho Associates, also known as the Vegas Mortgage Pimp, with a reputation of being able to help homebuyers get credit scores over 700 FICO in less than 12 months after bankruptcy. After one year of having aged secured credit cards, cardholders can then apply for any credit and get approved. They can get unsecured credit cards with no issues.

The First Step In Reestablishing Credit After Bankruptcy To Qualify For a Mortgage

In this blog, we will help our viewers get credit scores over 700 FICO in one year or less after a bankruptcy discharge. We do not charge anything. We help our viewers to maximize their credit scores and create a strong credit profile after bankruptcy so they can qualify for a mortgage at the lowest rate possible.

A prior bankruptcy or foreclosure on your credit report does not affect mortgage rates. There are no loan-level pricing adjustments on mortgage rates with prior bankruptcy or foreclosure. Loan-level pricing adjustments are pricing hits. However, credit scores do. The higher the borrower’s credit scores, the lower the mortgage rates. As mentioned earlier, three to five secured credit cards with at least a $500 credit limit are key.

The Mixture of New Credit Maximize Credit Score Increase

Besides three to five secured credit cards, you should get an installment loan or credit builder account. Many banks and credit unions will have credit rebuilder accounts. A credit rebuilder account is a savings account in which you set a monthly payment amount. That monthly payment gets applied toward your savings account or a certificate of deposit.

It is normal for a 12-month term. Once your 12-month term is up, the money gets returned. The monthly payment you make gets reported to all three credit bureaus as an installment loan. An auto loan is an installment loan. You can get an auto loan after bankruptcy discharge all day long. However, DO NOT get an auto loan if you plan on getting a mortgage soon. The average auto payment is $400 per month. A $400 per month monthly payment is equivalent to an $80,000 mortgage loan balance.

Types of Credit Tradelines To Have After Bankruptcy

There are other ways to get an installment credit tradeline to report on your credit report. Apply for a credit rebuilder program with Self. inc. How this works is you make a $25 to $50 monthly deposit to an FDIC bank. The bank reports the monthly payment on all three credit bureaus for 12 months. After 12 months, you have saved this money in a CD FDIC Bank Account. This money is then returned to you.

Credit Rebuilder Program Will Expedite Reestablishing Credit After Bankruptcy

Alternative credit tradelines like credit rebuilder programs will create an installment loan credit tradeline on your credit report, strengthening your credit profile and increasing your credit scores. Another tip Gustan Cho Associates has to open up three to five secured credit cards a $500 credit limit. If you can open more secured credit cards, it will help you.

Once the secured credit cards report to all three credit bureaus, your credit scores will skyrocket. Remember, if you are late on your payments on your secured credit cards, they will be reported to the credit bureaus. Never be late on your monthly credit card payments. It will hurt your chances of getting a mortgage.

Late Payments After Bankruptcy

No, anyone cannot have a credit score of over 700 FICO after a bankruptcy discharge. If you follow our directions at Gustan Cho Associates, you can achieve a credit score of over 700 just under a year after the bankruptcy discharge date.

We will help you prepare for a home mortgage after bankruptcy. Waiting out the mandatory period after bankruptcy does not automatically qualify you for a home mortgage. Lenders want to see re-established credit after bankruptcy. You cannot have late payments after bankruptcy.

How You Can Qualify For A Mortgage After Bankruptcy With Late Payments

Borrowers with late payments after bankruptcy are considered second offenders by mortgage lenders. It will be difficult to get an approve/eligible per automated underwriting system (AUS) with late payments after bankruptcy. One or two late payments after late payments after bankruptcy are not always a deal killer.

Late payments on any credit tradelines in the past 24 months will make getting mortgage approval difficult. The team at Gustan Cho Associates are experts in helping borrowers with late payments after bankruptcy. It would be best if you had several new credit tradelines with perfect payment history after the late payment after bankruptcy reports on the credit bureaus. The older the late payment after bankruptcy, the better your chances of getting a mortgage approval.

Reestablishing Credit After Bankruptcy But Getting Denied For Secured Credit Cards

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The easiest and fastest way of reestablishing credit after bankruptcy is by getting three secured credit cards and one installment credit-builder account that all report to the three credit reporting agencies.

The time to get these new lines of credit is as soon as possible from the bankruptcy’s discharge date. There are instances where a secured credit card company will deny your secured credit card application. WHAT?  GETTING DENIED FOR A SECURED CREDIT CARD?  Yes!!!

Contact Other Secured Credit Card Companies If You Get Denied For Secured Credit Card

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Some credit card companies will deny a consumer right after bankruptcy. This holds true for consumers who recently discharged bankruptcy with no credit tradelines. When this happens, try other credit card companies. You will find a secured credit card company that will approve you.

Get started with a credit rebuilder account if you get denied secured credit cards by all of them. After the credit rebuilder account reports your reporting history for three to four months, you will have a solid credit tradeline reporting on your credit report. You should have no problem getting a secured credit card approved.

When Can I Apply For Unsecured Credit Cards

Once your secured credit cards are seasoned for one year, you will be ready to get approved for unsecured credit cards. Do not close out your secured credit cards. See if you can get two unsecured credit cards. Many secured credit card companies will increase your credit limit without asking for an additional deposit.

Therefore, many of your secured credit cards will become unsecured. Some secured credit card companies may return your initial deposit when you open your secured credit card. As time ages with your open credit tradelines, your credit scores will keep increasing, and your credit profile will strengthen.

How To Prepare For a Home Mortgage After Bankruptcy

There are mandatory waiting period requirements after bankruptcy to qualify for government and conventional loans. However, just waiting out the minimum mandatory waiting period does not automatically qualify you for a home mortgage. Lenders expect borrowers to have reestablished their credit and not have any late payments after bankruptcy.

During the waiting period, homebuyers should diligently work on reestablishing their credit and boosting their credit scores. There is no reason why anyone cannot have credit scores of 700 FICO or higher one year after bankruptcy discharge if they follow our directions.

Waiting Period After Bankruptcy On Government And Conventional Loans

There are mandatory waiting period requirements after bankruptcy on government and conventional loans. FHA loans have a two-year waiting period after the Chapter 7 Bankruptcy discharge date. There is a three-year waiting period after foreclosure, deed-in-lieu of foreclosure, and short sale to qualify for FHA loans.

There is a two-year waiting period after Chapter 7 Bankruptcy, foreclosure, deed-in-lieu of foreclosure, or short sale to qualify for VA loans. There is a three-year waiting period after Chapter 7 Bankruptcy, foreclosure, deed-in-lieu of foreclosure, or short sale to qualify for a USDA loan. There is a four-year waiting period after Chapter 7 Bankruptcy, deed-in-lieu of foreclosure, and short sale to qualify for a conventional loan. There is a seven-year period after a foreclosure to qualify for conventional loans.

Fannie Mae and Freddie Mac Chapter 13 Guidelines on Conventional Loans

There is a two-year waiting period after the Chapter 13 Bankruptcy discharge date to qualify for a conventional loan. There is a four-year period after the Chapter 13 Bankruptcy dismissal date to qualify for conventional loans. Borrowers in a Chapter 13 Repayment plan can qualify for an FHA, and VA loan during the Chapter 13 Bankruptcy repayment without the bankruptcy being discharged and Trustee Approval on a manual underwrite. There is no waiting period after the Chapter 13 Bankruptcy discharge date to qualify for an FHA or VA loan. If the Chapter 13 Bankruptcy discharge date has not been seasoned for two years, the file must be manually underwritten.

Gustan Cho Associates is a five-star national mortgage company licensed in multiple states with no lender overlays on government and conventional loans. To qualify for a home mortgage with a lender with no lender overlays, please contact us at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.

Mortgage Options After Bankruptcy

There is a mandatory waiting period after bankruptcy and foreclosure to qualify for Home Loans. The waiting period for someone with a previous bankruptcy is two years from the discharge date of the bankruptcy and not the filing date to qualify for FHA and VA Home Loans. However, passing the waiting period after bankruptcy does not guarantee someone a mortgage loan approval.

The two-year minimum waiting period after the Chapter 7 bankruptcy discharge date is just one of the requirements to be eligible for home loans. Mortgage Lenders do not want the mortgage applicant to have any late payments or derogatory credit items after bankruptcy and to have re-established credit after bankruptcy. Re-establishing credit after bankruptcy? The following paragraphs discuss Re-Establishing Credit After Bankruptcy To Qualify For Mortgage.

Importance of Re-Establishing Credit After Bankruptcy

There are so many folks who want nothing to do with credit after bankruptcy discharge. Not re-establishing credit after bankruptcy will hurt people who are planning to buy a home at a later date. Consumers should re-establish their credit after bankruptcy discharge as soon as possible. Do not do it to use credit but rather to establish credit. Getting three to five secured credit cards is the easiest and fastest way to re-establish credit after bankruptcy and housing.

Damage To Credit After Bankruptcy

A bankruptcy will drop someone’s credit score by at least 150 points. The bad news is that credit is shot, but the good news is that the drop in scores is temporary. Chances are that no creditor will give a person who just filed bankruptcy and had a bankruptcy discharge credit, so how can someone re-establish credit after bankruptcy? Getting secured credit cards is the best way to re-establish credit after bankruptcy.

Not Getting New Credit Tradelines After Bankruptcy Will Affect Getting Mortgage Approval

People who just got a bankruptcy discharge assume they will no longer get credit and give up on re-establishing credit. However, this is not the case. Consumers can easily get credit scores of over 700 one year after a bankruptcy discharge as long as they play their cards right. As soon as consumers get their Chapter 7 bankruptcy discharged, they get three to five secured credit cards. Ensure a minimum credit limit of $500 for maximum optimization.

Credit After Bankruptcy

Chances are that credit scores will be in the upper 400s after Chapter 7 bankruptcy discharge is recorded. No worries. That low credit score is just temporary. Credit scores will most likely go to the mid 500’s even if consumers do nothing about re-establishing credit after bankruptcy. However, consumers can get three to five secured credit cards. Each secured credit card will boost credit scores by at least 20 points.

The Older The Secured Credit Card Is, The Stronger Your Credit Profile Gets

It gets even better. Credit scores will increase as credit payments on secured credit cards age. Keep using secured credit cards regularly. Pay it down, so the credit balance is less than 10% of the credit limit. There is no reason why credit scores would not be in the upper 600s or lower 700’s one year after the Chapter 7 bankruptcy discharge date.

Road To Great Credit With Secured Credit Cards

Secured credit cards are the best tools for re-establishing credit after bankruptcy. Secured credit cards are so important in re-establishing credit after bankruptcy. Secured credit card companies will most likely increase credit limits after one year if credit cardholders have a good payment history without requiring additional deposits.

How Does Reestablishing Credit After Bankruptcy With Secured Credit Cards Work?

Secured credit cards are the easiest and fastest way reestablishing credit after bankruptcy. The way a secured credit card works is the secured credit card company will require credit cardholders to put in a deposit with them for a certain amount they choose. For example, consumers can get a secured credit card by placing a $500 deposit with the secured credit card institution.

In return, the secured credit card company will issue a secured credit card with a $500 credit limit. There will be a minimum amount due each month. Interest will be charged on balance despite a $500 deposit with the secured credit card institution.

Credit Reporting Agencies

Secured credit card companies will report credit card limits, balances, minimum amount due, and payment history. Cardholders with minimum secured card monthly payments will be reported late on all three credit bureaus. Credit scores will drop, and the credit report will report late payment history. A secured credit card is like an unsecured credit card. Late payment on a secured credit card is no different from a traditional unsecured credit card.

Secured Credit Card Companies Will Increase Credit Limit As Credit Cardholder Develops a History of Timely Payments

If cardholders religiously use the secured card and make timely payments every month, the secured credit card company will increase the secured credit card limit without requiring additional deposits.  After one year of seasoning timely payment history on secured credit cards, cardholders will be eligible to apply for unsecured credit cards.

Get Approved For Unsecured Credit Cards After Six to 12 Months Using Secured Credit Cards

Reestablishing credit after bankruptcy with secured credit cards is extremely important. As the secured card ages, secured credit card companies will raise the credit limit on the secured credit card without asking for additional deposits. After six to 12 months of timely payment on secured credit cards, consumers will be eligible for unsecured credit cards.

Reestablishing Credit After Bankruptcy With Secured Credit Cards Leads To Credit Approval With Unsecured Credit Cards

Reestablishing Credit After Bankruptcy With Secured Credit Cards Leads To Credit Approval With Unsecured Credit Cards

Reestablishing credit after bankruptcy with secured credit cards leads to credit approval with unsecured credit cards. Consumers will also be eligible for unsecured credit such as unsecured credit cards, gas cards, department store cards, furniture store cards, and other credit. Always make the minimum credit card payment on time and never be late. One late payment on any credit card or creditor can drop credit scores by 50 or more points. Late payment history will be on the credit report for a period of 7 years.

Reestablishing Credit After Bankruptcy During Waiting Period After Discharged Date

There is a mandatory waiting period after bankruptcy and foreclosure to qualify for Home Loans. The waiting period for someone with a previous bankruptcy is two years from the discharge date of the bankruptcy and not the filing date to qualify for FHA and VA Home Loans. However, passing the waiting period after bankruptcy does not guarantee someone a mortgage loan approval.

Reestablishing Credit After Bankruptcy With Timely Payments On New Credit Tradelines

The two-year minimum waiting period after the Chapter 7 bankruptcy discharge date is just one of the requirements to be eligible for home loans. Mortgage Lenders do not want the mortgage applicant to have any late payments or derogatory credit items after bankruptcy and to have re-established credit after bankruptcy. Re-establishing credit after bankruptcy? The following paragraphs discuss Re-Establishing Credit After Bankruptcy To Qualify For Mortgage.

Importance Of Reestablishing Credit After Bankruptcy

There are so many folks who want nothing to do with credit after bankruptcy discharge. Not re-establishing credit after bankruptcy will hurt people who are planning to buy a home at a later date. Consumers should re-establish their credit after bankruptcy discharge as soon as possible. Do not do it to use credit but rather to establish credit. Getting three to five secured credit cards is the easiest and fastest way to re-establish credit after bankruptcy and housing.

Fastest Way To Reestablishing Credit After Bankruptcy For Mortgage Approval

The easiest and fastest way to reestablish credit after bankruptcy for mortgage approval is by getting three to five secured credit cards the minute you get your bankruptcy discharged. Just waiting out the bankruptcy waiting period requirements does not guarantee a mortgage loan approval. Lenders want to see you rebuilding and reestablishing credit after bankruptcy.

Qualifying for a residential mortgage loan after bankruptcy is not difficult. First and foremost, there is a mandatory two-year waiting period after Chapter 7 bankruptcy to qualify for FHA and VA loans. There is a 4-year waiting period to qualify for a  conventional loan after Chapter 7 bankruptcy. Lenders want the mortgage borrower to have re-established credit after bankruptcy.

Most Lenders Will Not Approve Borrowers With Late Payments After Bankruptcy

No late payments after their bankruptcy discharge. One or two late payments are not deal killers. But chronic late payments, collections, charge-offs, and disregard for credit will not fly after bankruptcy. It is better to have lower credit scores and outstanding collections than late payments in the past 12 months.

As long as the mortgage applicant has re-established credit after bankruptcy and has passed the mandatory two-year waiting period, they should have no problem qualifying for FHA and VA loansTimely payments after bankruptcy and foreclosure are a must. Late payments after bankruptcy and foreclosure are the kiss of death. Although not always impossible, many mortgage lenders consider borrowers with late payments after bankruptcy and foreclosure as second offenders.

Lenders With No Overlays on Home Mortgages

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Gustan Cho Associates has no overlays on government and conventional loans. Homebuyers with less-than-perfect credit need to qualify for a mortgage with a lender with no overlays on FHA, VA, USDA, or Conventional loans, please contact us at Gustan Cho Associates at 800-900-8569. Text us for a faster response. You can also email us at gcho@gustancho.com.

Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays. Gustan Cho Associates are mortgage brokers licensed in 48 states with over 190 wholesale lenders. Over 80% of our clients are borrowers who could not qualify at other mortgage companies due to lender overlays or due to the lender not having the mortgage options best suited for them.


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