A credit report is a record that encompasses the entire history of your borrowing and repaying, including information about your late payment and bankruptcy. This credit report is entitled under the federal laws.
A credit report gives information to the mortgage companies and individuals regarding your credit history and helps them to determine whether to lend you further or not. A credit report would also show all the payments made by you faithfully on time throughout your life but still you may not become eligible to get more credit because you cannot ever pay off the credit you have.
Credit Reports Issued After Bankruptcy
If you declare yourself as a bankrupt, then your bankruptcy can be reported on your credit report for 10 years from the date of filing of the case. After filing a bankruptcy if you are able to voluntarily dismiss it before the discharge, it becomes the responsibility of the credit reporting agency to report the dismissal and also the bankruptcy filing. After the discharge, you are permitted under federal law to have the balance of each discharged debt reported as ‘O’.
Rebuilding Credit History Before Refinancing
If you are in need to refinance your mortgage, the first thing that you need to do is to rebuild your credit history. This will reflect on your credit report which is a key indicator to your lender. Although Chapter 13 and Chapter 7 bankruptcy would reflect on your report for seven and ten years respectively, you need not to despair. To get your credit back on your solid footing you can follow the concrete steps of paying your bills on time.
A credit report also reflects the assets you hold, so you need to be careful of making your spending habits into saving habits. Also you need to do regular scrutiny of your credit report because mistake on your credit history would bring successive miseries to you. If you have received a discharge from bankruptcy, then you need to get that discharge noted on your report. This would serve as a proof that the old debt is no longer legally enforceable.
Initial Refinancing Steps After Bankruptcy
The initial steps to refinance your mortgage after you have declared bankrupt are reviewing the following:
- Payment schedule to trustee
- Monthly expenses
- Payment history to trustee
- Monthly cash flow
- Potential savings
Since, you have been declared as a bankrupt, you need to pay higher interest during your refinance. But the most important step you need to follow before you refinance your mortgage is to find the right lender for your situation.
It is also possible for you to lower your payments. You can then save money each month and there would be opportunities for you to refinance your existing debts with lower payments. Mortgage lenders will likely consider refinancing your mortgage after bankruptcy because the risks that are involved in refinancing an existing mortgage are extremely low, thus lending them chances of making good profit.