It’s no secret that being in debt can have a significant negative effect on your credit score. Although bankruptcy can help get debt problems under control, it is likely to cause a further drop – at least temporarily.

However, just because you file for bankruptcy doesn’t mean you won’t ever need to use credit again. Credit is a nearly unavoidable fact of life, especially for major purchases. So, what happens when a person wants to take out a mortgage to buy a house after going through bankruptcy?

It may be possible to get a mortgage with a poor credit score. However, the interest rate will likely be high and the terms will probably be somewhat unfavorable. In the end, this can end up costing the borrower a lot of money.

A better option is to try and improve your credit score before you start shopping for a home.

The first step in doing this is to get a copy of your credit report from each of the three reporting agencies and look it over for any errors. If there is any incorrect information – for example, the reports list a debt that was discharged in bankruptcy – call the agency and ask them to fix the error.

Then, make an appointment to sit down with a loan officer at your bank or credit union. Ask them to review your credit history and point out any red flags that might disqualify you from getting a mortgage. By knowing what the lenders are looking for, you will be better able to focus your efforts.

Of course, you can’t fix your credit score overnight. But, by confronting your problems head-on, you will be able to put yourself in a good position to qualify for a mortgage eventually.

Source: Bankrate.com, “Improve credit score before buying home,” Steve Bucci, August 16, 2012.