I was in a really bad situation about a year ago. I lost my job right after a big relocating move. I was forced to file for a chapter 13. Why is it so hard to get approved for anything and how long does it take for me to restart my credit. Iâ??ve been given tons of advice from friends and well wishers but a bit weary of whos to take. thank you in advance.
Although youâ??re currently repairing your credit through on-time payments to your creditors, brand new credit applications are almost always declined. Especially applicable in the early stages of Chapter 13, new credit applications cannot be processed because of your income to debt ratio. Most of your income is promised for the next five years, on average, to past creditors. Thereâ??s simply no room to acquire more debt through a new credit card. Creditors look over your history and income levels, effectively determining that itâ??s not possible for you to pay any more debt each month. Itâ??s not just your history that creditors analyze, but also your FICO, or credit score. Chapter 13 drops this value down substantially. In todayâ??s lending world, banks are wary about providing credit to anyone that doesnâ??t have a stellar credit record. Although youâ??re showing responsibility with payments, the credit score needs several years of on-time payments to slowly rise to a better value. Once your debts are paid off through Chapter 13, you should see a relatively sharp increase in your score. Credit will be easier to secure after the payments are complete.
