Many people think that, since a bankruptcy stays on your credit report for ten years, they'll be unable to get any kind of credit. Not true.
The truth is, a bankruptcy will continue to affect you until it drops off your record... but not as profoundly as you might think. As time passes after your discharge, it will become less important in the eyes of potential lenders... as long as you manage your finances responsibly.
The first year after bankruptcy will be the hardest. Lenders will see that you have had recent financial troubles, and will often be hesitant to issue a credit card or lend you money. Getting an unsecured credit card could prove quite difficult, although there are a few lenders that may be willing to give you a low limit card (usually $200 to $500).
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If you can't get an unsecured card, it's important to at least get a secured credit card. You'll be limited to what you pay in, but this will at least allow you to pay bills online, book hotel rooms, and travel without cash. Plus, as long as you make timely payments, many secured card lenders will report your account as current on your credit report. This helps you improve your credit score more quickly, reducing the effect of bankruptcy on your life.
You might be able to get a car loan after your bankruptcy has been discharged for a year. Be prepared for a substantially higher interest rate than you're used to, though. The longer you wait after your bankruptcy, the lower your interest rate will be.
Bankruptcy will also keep you from getting a mortgage loan for two years. After that, if you have taken steps to rebuild your credit, you may be able to obtain an FHA loan with down payment as low as 3% of the purchase price.
In some respects, bankruptcy will affect you for the next ten years. By being financially responsible, though, you can minimize these effects, and get back to a normal life surprisingly quickly.
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