Financial Literacy - Credit savvy
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Your post-bankruptcy credit score

Once your financial house is in order and your credit score goes up, you could qualify for an FHA loan. Generally, it takes about two years after a bankruptcy discharge to qualify for an FHA loan.

"It's a great time to mortgage a home because FHA limits are the highest they've ever been and government is certainly the way to go for a more recent (bankruptcy) filer," Snyder says.

Although the FHA program does not officially use credit scores to qualify a loan, individual lenders may.

"Most of the lenders now require at least a 580 score to get an FHA mortgage and some go down as far as 550," he says.

7. Be wary of credit repair services

Some credit repair and credit "doctor" companies make grandiose claims that they can clean the slate and repair your credit file, often for a substantial fee.

However, many of these organizations turn out to be scams that will take your money and leave you with a still-damaged credit file, according to the Federal Trade Commission.

Some of these companies claim they can remove negative information from your credit file. This is untrue if the information is accurate. Only time will cause those entries to drop off your credit reports.

In general, negative information can stay on your credit report for up to seven years, with some exceptions.

The public record of the bankruptcy filing itself is noted separately from the negative account information associated with it. For example, Chapter 11 and 7 bankruptcies remain for up to 10 years on your credit report and Chapter 13 bankruptcies can remain for up to seven years, but the individual accounts included in any consumer bankruptcy should drop from your credit report after seven years, according to MyFICO.com.

The dubious nature of claims made by some credit repair operations has caught the eye of the government. The FTC, along with 24 state agencies, cracked down on almost three dozen companies in October 2008.

Bottom line: It probably took you awhile to get into bankruptcy in the first place and it will take awhile to repair your credit file and boost your score. And while some of these organizations may legitimately have consumers' interests in mind, many of them don't.

"I think a lot of them are actually aligned with the creditors and they will work with you as long as you are paying," says Dee E. Hoffman, executive director of the National Credit Restoration Alliance in Conroe, Texas. "But the moment you are in distress, you'll find they have the same face as the creditors."

The FTC alerts consumers about what to look out for when considering a credit repair service.

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