I’ve seen this play out with a lot of clients over the years. Once that bankruptcy ages off your report, most lenders really do move on—unless you’re dealing with super conservative banks, but those are rare these days. What trips people up is recent stuff, like you said. I had a buyer last year who had a bankruptcy from a decade ago, but a single late payment from six months back almost tanked their approval. It’s frustrating, but lenders seem to care more about what you’re doing now than what happened ages ago. Still, I wouldn’t say you’re being paranoid—there are always a few lenders who get hung up on the word “bankruptcy,” no matter how old it is. Just not as many as people think.
Title: Does An Old Bankruptcy Matter More Than A Recent One?
lenders seem to care more about what you’re doing now than what happened ages ago
Totally agree. I always joke that lenders have the memory of a goldfish when it comes to old bankruptcies, but if you sneeze wrong on your credit card last month, suddenly it’s DEFCON 1. Anyone else notice they’ll grill you over a $25 late fee from last year but barely blink at stuff from ten years ago? Makes you wonder if they just like keeping us on our toes...
lenders have the memory of a goldfish when it comes to old bankruptcies, but if you sneeze wrong on your credit card last month, suddenly it’s DEFCON 1.
That’s pretty much spot on. In my experience, lenders are all about what you’ve done lately. I’ve seen folks with a decade-old bankruptcy get approved for decent loans, as long as their recent track record is clean. But one missed payment in the last year? Suddenly you’re getting the third degree. It’s almost like they care more about your current habits than your past mistakes... which, honestly, makes sense from a risk perspective, even if it feels a bit harsh sometimes.
Honestly, I’ve seen the same thing play out. Lenders really do seem to have short memories about old bankruptcies, especially if you’ve rebuilt your credit since then. I know someone who filed over 10 years ago, but because they kept everything spotless after, they got a car loan with a decent rate. Meanwhile, a single late payment last year nearly tanked my own mortgage application... It’s frustrating, but I get it—recent behavior is just a bigger red flag for them. Feels unfair sometimes though, especially when life throws curveballs.
It really does feel backwards sometimes, doesn’t it? Lenders put so much weight on what’s happened in the last year or two, even if you’ve spent years building things back up. I get why they do it—recent issues can signal ongoing risk—but it’s tough when one slip-up overshadows a decade of good habits. Have you looked into whether there’s anything on your credit report that might be lingering from before? Sometimes little errors stick around and make things worse than they should be.
