Next to bankruptcy, a home foreclosure is the most damaging entry you can have on your credit report. But because credit scores and reports measure your current credit-worthiness, the effect of a foreclosure listing decreases as it ages. How your credit fares depends on how you handle yourself in other credit-related areas. You won't immediately bounce back from a foreclosure, but you can slowly build back the credit you lost by making good decisions.
Step 1
Pay all your bills each month. Timely payments comprise 35 percent of your total credit score. Despite your foreclosure, each on-time bill payment boosts your score a small amount, and that impact can be significant over time. The more bills you have to pay, the better it will be for your credit score.
Step 2
Carry at least two credit cards, if possible, and use them sparingly. Limit your spending to at least 50 percent of your total credit limit. Ideally, you should keep it under 30 percent. Spend sparingly to prove that you're using your credit but being responsible. And always pay your bill in full every month. How you handle yourself in the aftermath of a foreclosure will make a big difference in how lenders perceive you.
Step 3
Place money in credit deposits or other short-term investment vehicles. These get listed on your credit report and show you have money to spare and know how to utilize it. Opt for the quickest credit deposits possible (usually seven days) and take out new credit deposits as soon as possible to maximize the number of listings.
Step 4
Check your credit reports for negative listings that are inaccurate. This sometimes happens, but you have the right to contact those creditors and determine whether it is a legitimate entry or a false one. If the debt cannot be confirmed, have the creditor remove it.
Step 5
Pay off any and all legitimate debts listed on your credit report, and do so on the condition that the creditor designate the entry as being paid.
Member Comments