Every year hundreds of thousands of Americans file for bankruptcy for various reasons. This financial move is a way of getting out of debt when there are no other choices left, but it causes your credit score to plummet. With a credit score lowered critically by bankruptcy, it can be extremely difficult to get a loan in the future, but there are several things you can do to be able to get a personal loan after bankruptcy.
Improve your credit after bankruptcy
One of the most important and relatively simple things you can do after filing for bankruptcy is waiting. The more time passes after you file for bankruptcy, the more likely you will be to get approved for a loan. The amount of time you have to wait for also depends on the type of bankruptcy you’ve applied for. For instance, Chapter 7 bankruptcy stays on your credit record for 10 years, while your Chapter 13 bankruptcy record will be available to lenders for up to 7 years. This may sound like a long time, but bankruptcy absolves you of most of your debt, so you shouldn’t need to get another loan for some time while you’re getting your finances in order. Some of the things you can do to improve your credit score is making sure that you pay all your bills in a timely manner, not getting into any more debt, repaying your previous debt if you’ve filed for bankruptcy under Chapter 13 and repaying all the debt that wasn’t cleared by filing for bankruptcy.
Make sure that your credit history is accurate
Once you’ve gotten your credit score back up, check your credit history and make sure that all the information is up-to-date and accurate. Your credit report should reflect that you don’t have any more debt left of that you’ve repaid your debt under Chapter 13 bankruptcy. You should also double-check that all the dates regarding your bankruptcy are correct, as sometimes there are mistakes.
File loan applications with numerous lenders after declaring bankruptcy
Once you’ve gotten your credit score up and your credit history up-to-date, it’s time to apply for a loan, but you shouldn’t make the mistake of applying with only one bank. Chances are, at least one lender will refuse you, so you need to apply for loans with numerous lenders. Your chances of getting approved are better with peer-to-peer lenders, credit unions, places like Loans Under 36, etc. You should also consider getting someone to co-sign your loan or put up assets as collateral. It is also important to compare the terms of different loans if you get more than one approval, as you are likely to get quite unfavorable loan terms after filing for bankruptcy.
Other ways to get a loan after bankruptcy
If you’re looking to get a smaller loan for a short period of time and your credit score and history are not good enough to get a loan approved by a bank, you can try peer-to-peer lending on platforms like FinSocial, as with us you don’t need to have a certain credit score to be able to get a loan.