My credit score is recovering after a bankruptcy — how can I get a mortgage?

My credit score is recovering after a bankruptcy — how can I get a mortgage?

I have a bankruptcy on my record, but my credit score is moving up. It’s now 650. What should I do to be able to get a home loan, if that’s even possible? — Don 

Hello, Don. Rebuilding your credit after bankruptcy is no easy task, and I applaud your progress! A 650 credit score is a fair score by FICO standards, so while your score may not yet be where you’d like it to be, it’s far from the worst it could be.

It is possible to get a mortgage after a bankruptcy, and it’s possible to get a mortgage with a fair credit score

Option 1: Give yourself more time

When it comes to negative information on your credit reports, time is the best healer. You didn’t say when your bankruptcy occurred, but it typically remains on your credit report for up to 10 years, depending on the type of bankruptcy.

If you’re able to wait until the bankruptcy drops off your credit reports and work to improve your scores, you may have an easier time securing a mortgage and doing so at a favorable interest rate.

Option 2: Work on your credit scores now

If it’ll take years for the bankruptcy to fall off your credit reports, or you feel strongly that now is the right time to buy a house, your next best option is to spend a few months improving your credit scores as much as possible.

. Even though those factors together may make it more difficult, it’s still possible to get a mortgage when your low, but rising, credit score is due to bankruptcy. The caveat, though, is that the lower your score and the poorer your credit history, the more probable it is that you’ll get offered a mortgage interest rate that’s higher than you’d like.

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