It is an undeniable fact that foreclosure can severely affect your credit rating. However, it is not impossible to improve your credit scores even after such a setback as a foreclosure.
Adopt A Positive Attitude
The first step in the right direction is to adopt a positive attitude towards maintaining your finances more diligently.
Naturally, unavoidable circumstances such as a terminal illness, divorce or even the death of a loved one make you applicable to special circumstances.
As such, a foreclosure may be reported but you may be able to negotiate a deal with your lenders.
However, if the reasons for your inability to pay were poor mismanagement of finances or a high adjustable-rate mortgage, then it is likely that you may not find your lender quite so complacent.
Foreclosure Fall-Off Time
The time required for a foreclosure to fall out of the credit report is seven years, starting from the date the foreclosure was filed.
If you are close to the end of your seven years, your credit score will improve naturally. If you need credit, it is smart to wait until the foreclosure is off your report.
On the other hand, if it is at the beginning of the foreclosure then there are steps that one can take to improve the credit scoring.
Basic Steps To Take After A Foreclosure
The basic steps to take that can help you get a loan even after a foreclosure is evident on your credit report :
- Talk to a lawyer and know your rights,
- Pay all your other bills on time,
- Pay off all your other debts,
- If you need a loan go for government-backed loans.
Basic Steps To Take To Have A Foreclosure Written Off
Getting a foreclosure written off completely from your credit report is not an impossibility. Once again, one can follow a few steps to have a foreclosure written off.
- Check for inaccuracies:- Start with getting a copy of your credit report from Experian, Equifax and TransUnion. Go through the entire credit report for any inaccuracy. You would need to review your report quite thoroughly. If you find any detail misrepresented, you can file a dispute with each of the three credit bureaus. These companies are required to request verification of the information within 30 days. If the information is not verified for foreclosure within the time frame, they can be removed from your credit report.
- Contact The Lender Directly:- You can even contact the lender directly. If a discrepancy in the credit report has been identified, present it to the lender and claim to have the foreclosure removed in a matter of 30 days. There are times that lenders may not be able to verify the information due to poor record-keeping or being too busy to investigate every single detail of the credit report. In either scenario, you can have the foreclosure deleted directly by the lender.
- Get Professional Credit Repair Help:- Getting in touch with a credit repair company is quite effective. Once you hand over your credit reports to them, they deal with the lender and credit bureaus directly. They file any disputes they encounter. And, having a team of legal professionals who are well acquainted with the Law is highly instrumental in getting your credit report in order again.
Acquiring future loans gets difficult as lenders are hesitant to give loans as you have gained a reputation as a defaulter or charge a higher interest rate if they do give you a loan. A foreclosure can affect your credit rating negatively, but that does not mean that it is an error that cannot be rectified.