Foreclosures and bankruptcy will be on your credit report for years. That doesn’t mean that you have to suffer for it indefinitely. The quickest way to rebuild credit is to take on new debt. Unfortunately, there aren’t many lenders who are willing to do this right after a bankruptcy. But you can reasonably expect that lenders who specialize in high-risk borrowers will be prepared to take you on after only a couple years—that’s better than seven!
Is it all about my credit store?
Lenders and credit rating agencies will lead you to believe that you are your credit score. Hands down, your credit score is the single greatest factor when lenders are assessing you as a candidate for new credit. However, it is only one component of how creditors decide who is credit worthy.
As far as qualifying for a new mortgage loan goes, your credit score isn’t equal in the eyes of every lender. The process by which lenders evaluate your credit score isn’t universal either. Some creditors take an average of your credit score from the three major credit rating agencies. Others will take the median number of the three as most representative of you as a borrower.
These ‘magic numbers’ are given the most weight when you apply for a mortgage.
However, someone who has had a bankruptcy should shop around for a lender. Some lenders are willing to look at your credit holistically and historically. They may build a profile of you as a borrower before you ran into trouble. If, at one time or another, you had outstanding credit, regularly paid as agreed, and had substantial income with a good employment record, you may qualify for a higher risk mortgage in as little as two years after your bankruptcy.