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One of the biggest hurdles to getting a home mortgage after bankruptcy is your credit score. A bankruptcy can significantly damage your credit score, since it implies that you are irresponsible with credit. And it shows that some of your debts may not have been paid. This means that it is important that you try and rebuild your credit as soon as you can after bankruptcy. And even though that bankruptcy can stay on your credit report for up to 10 years, you can build a good enough credit score for a home mortgage within a couple of years if you follow good credit practices.

A secured credit card can help you build your credit score

One way to help improve your credit score after bankruptcy is to use a secured credit card. These are cards that only allow you to have a limit equal to what is in your bank account. Often, you will find that a secured credit card will only come with a balance of $200 to $600. This may not seem like a lot, and it isn’t, but it is a good first step, and way to begin improving your credit score.

Here are some tips offered by MSN Money Central about selecting a secured credit card:

• No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don’t need to pay these to build your credit.
• Reports to the major credit bureaus. You’re not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Call and ask if the card issuer regularly reports to all three before you apply.
• Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.

Remember that you are trying to improve your credit score. You should avoid maxing out your secured credit card, and you should try to pay the balance off each month. This will allow you to prove that you have turned a corner. And it will show that you are using credit responsibly, helping push your credit score higher, despite your bankruptcy.

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