Ask Dr. Don By Don Taylor, Ph.D., CFA • Bankrate.com

Post-bankruptcy borrowing

Dear Dr. Don,
I filed bankruptcy after my divorce about three years ago. I am trying to qualify for a mortgage loan, and I am always being turned down. What can I do?
Noreen Nixes

Dear Noreen,
Normally, it takes at least two years before you can qualify for a mortgage loan after a Chapter 7 bankruptcy filing. To qualify, you have to keep your credit history squeaky clean since the bankruptcy discharge and have strong income and debt ratios.

Frequent loan applications can hurt your credit score. Comparison shopping for a mortgage loan is one thing; multiple denials are another. A credit application will stay on your credit report for two years. If you've been periodically applying for mortgage loans and been denied, those denials show up on your credit report and influence your credit score.

When you apply several places in a short period for a secured loan such as a mortgage or a car loan, it's obvious that you're comparison shopping, and the multiple applications don't hurt your credit score. What's a short period? About four weeks. String things along and the multiple inquiries will hurt your credit score.

Get a copy of your credit report and credit score from at least one of the three major consumer-reporting agencies. If you've been turned down by a lender in the last 60 days, you can get a free copy of your credit report from the agency used by your lender in making the lending decision. Review the report for accuracy and dispute any inaccurate information.

You can turn things around. Stop flailing about trying to get credit. Keep an eye on your credit score and credit report. Don't gear up to make another attempt to get a mortgage loan until your credit history is ready for the challenge.