A foreclosure can mean more than the loss of your residence. It can also rob you of the ability to open new credit accounts, get insurance or get a new job. All of those things are dependent, at least in part, on your credit score. Fair Isaac Corp. (FICO), originator of the FICO credit score, maintains foreclosures have a very negative effect. Everyone can eventually get a foreclosure off their credit report because there is a time limit on how long it can be reported. However, you may be able to get it off even earlier.
Step 1
Review your credit reports to see the foreclosure details that are being reported. You are entitled to one free, no-obligation report from each of the three credit bureaus annually. Request the reports and examine the foreclosure information very carefully.
Step 2
Note any errors in the foreclosure listing on your credit reports. The Foreclosure Fish site says that banks make frequent errors. This is especially true when the economy is bad and banks are swamped with foreclosure paperwork. They may make a mistake with the amount, date, payment history or any other detail.
Step 3
Dispute reporting of the foreclosure based on any of the errors you found. Only dispute one error; save the others in case your first dispute is denied. You must file a dispute separately with each of the three major credit bureaus.
Step 4
Dispute another error if your first effort is rejected. The credit bureaus will investigate your allegations and remove the foreclosure if the bank cannot verify the information. You will be notified of the removal, or the bureaus will tell you if your dispute was not successful. Don't be discouraged if you're denied the first time. Move on to the next error and go through the process again.
Step 5
Wait until the end of the legal reporting period if you cannot get the foreclosure removed by disputing it. Foreclosure Fish says it can only remain on your credit reports for seven to ten years, depending on the state and circumstances. Check your reports at the end of the legal period and dispute the foreclosure if it is still there.
Tips and Warnings
- Even if you can't get a foreclosure removed from your credit report before the legal reporting period expires, Foreclosure Fish maintains its influence will diminish over time. Creditors place the biggest weight on your most recent history. Concentrate on managing your current accounts and making on-time payments, and your credit score will go up despite the foreclosure. If you do, FICO says your score can rebound significantly within two years.
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