For most people, the prospect of buying a house after a foreclosure or bankruptcy looks pretty grim—but it doesn’t have to be. You can still buy a home if you have bad credit; the catch is that you’re probably going to pay more than a buyer who doesn’t have a recent foreclosure or bankruptcy.
The good news? You can begin to repair your credit quickly after filing bankruptcy or having a home foreclosed, and these tips can help.
What Happens to Your Chances of Buying a Home After a Foreclosure or Bankruptcy?
A bankruptcy typically stays on your credit report for about 10 years, and it affects your score for that long, too.
However, if you wait four years after filing for bankruptcy (or after participating in a short sale), you may be eligible for even better rates.
FHA guidelines say that you could qualify for a low-down-payment program in as little as 24 months after a foreclosure, and three years if you have bad credit after participating in a short sale.
Can You Improve Your Credit to Buy a Home?
The first thing you should do, if you haven’t already, is get a free copy of your credit report from AnnualCreditReport.com. Thanks to the Federal Trade Commission and the Fair Credit Reporting Act, or FCRA, you’re entitled to one free copy at your request every 12 months.
To improve your credit after a bankruptcy, Bev O’Shea of Nerdwallet says you should start with a secured loan or secured credit card. She also suggests getting a co-signed credit card or loan—but the key is establishing a new record of on-time payments and keeping balances low relative to their limits.
Are You Looking for a New Home in Charlotte?
Explore our listings to find Charlotte, North Carolina new homes today. You can also check out:
- All Charlotte, NC real estate listings
- Luxury homes for sale in Charlotte
- Ballantyne homes for sale
- Homes for sale in Waxhaw, NC
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