No matter what circumstances in your life necessitated that you file bankruptcy, once your bankruptcy is over and has been discharged, the time has come for you to rebuild your credit history from the ground up and start borrowing money again. Getting your first loan after bankruptcy can be a daunting thought, but remarkably, you are in a better place as far as being approved is concerned than you were just a week ago.

Clean Slate To Work With

Borrowing money after bankruptcy is actually easier than it is for those borrowers with bad credit who have not gone through bankruptcy! Lenders look at you in different ways than they did before. While it is true that bankruptcy is frowned upon by lenders because in filing bankruptcy, you basically forfeit the responsibility that you have towards paying your financial obligations, in other ways lenders see you as an appealing potential customer. You are suddenly free from all of your debts, and this clean slate looks good to lenders because if you do not owe anything, you should not have trouble paying your loan payments.

Your Employment History And Borrowing After Bankruptcy

Your employment history will also have a great deal to do with the amount and type of loan that you can qualify when you are fresh out of bankruptcy. Your employment history is the only stable piece of information that lenders can discern about your situation. And for this reason, being on the job for at least five years is important (although not crucial) in the decision that many lenders will make regarding your application for a loan at the time.

Why is this information important to creditors? Because the law limits the number of bankruptcies that one individual can file in a particular number of years, creditors know that those borrowers fresh out of bankruptcy cannot file again soon, making it an almost certainty that they will pay. And having a steady job means that if a borrower does not pay, the creditor can obtain a judgment against the borrower and garnish their wages.

Loans For Bankruptcy Borrowers

Your bad credit loan after your bankruptcy discharge can provide you with an opportunity to rectify your credit history and regain your borrowing reputation. Many lenders offer types of loans for those who have been through bankruptcy, but it is best to start out with a small amount that is easy to manage and that you are certain that you can afford. Many of the loans written in the early days following a bankruptcy discharge are secured loans that require that collateral be pledged, although smaller amounts can be qualified for with just a signature, also called unsecured loans.

Managing Your Available Credit

Whatever type of loan you decide to start with to build your credit back up, be sure to follow staunchly by the terms of your lending agreement. You have been afforded a second chance with your credit, which gives you the incentive to make your payments in a timely manner, never being late, and earlier than due when possible. By becoming a good master of your credit, you will find that your credit score will soar to new heights and you will be approved for bigger loans in the future, including substantial loans like those needed to purchase a home.

Author Bio: Jessica Peterson is an Bad Credit Unsecured Loan Consultant with more than twenty years of experience. For more information about Personal Loans, no credit check loans, guaranteed loans, personal loans, car loans, guaranteed student loans and other financial products please visit http://www.yourloanservices.com

Category: Finances
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