Generally bad credit gets started at a young age simply from lack of knowledge of how the credit system works. However lack of knowledge will not be looked at any differently than if you knew full well what you were doing by lenders.
OR
Sometimes Bad Credit or Chapter 7 Bankruptcy & Chapter 13 Bankruptcy is brought on by catastrophic circumstances beyond the control of the borrower. Some of the circumstances viewed as "beyond the control of the borrower are:
All such circumstances must be able to clearly document especially after a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy
1) Serious illness
2) Life changing or life threatening accident
After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy the lender is very critical of what they consider unavoidable circumstances.
Loss of job, separation, divorce etc are NOT considered by lenders as beyond your control ( though we certainly understand )
These guidelines are being presented to help you understand how lenders think.
Bad Credit
Being late on a single payment can knock your score down over 100 points.
Payments must be made early enough to reach the lender AND POST by the due date or they will be considered late. Simply mailing in the payment early is not enough. Store cards are notorious for counting your payment as being 30 days late if received a day late as are a few major cards.
Fixing The Damage
To fix the damage of poor payment history, follow the advice given
1) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy Bring all accounts current
2) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy pay down any accont with a balance to less than 30% of the High Credit
3) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy do NOT close any account no matter how bad your history has been ( 35% of your credit score is based on HOW LONG you have had credit. Closing an account makes you lose that history and thus make your score TANK
4) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy ask your credit card companies to raise the maximum credit limit so as to better your score ( keep your balance below 30% of max credit )
5) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy re-establish credit.
a) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy buy a car
b) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy apply for a secured credit card of a $1000.00 or more ( under $1000.00 is not veiwed as countable
6) After a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy do NOT speak to collection agencies, as many times they will "re-up" your collection which hurts your score. Consult with us and IF we need to do anything with the collection agencies we will have you do it at the closing table so as NOT to hurt your chances at buying a home.
