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How To Repair Credit After Foreclosure

foreclosureGoing through a foreclosure is an extremely difficult experience that can make it much harder to qualify for new loans or other types of credit in the future.  It’s one of the most damaging items that can go on your credit report, resulting in as much as a 200 point drop.  And if you’ve experienced the effects of foreclosure firsthand, you may even be questioning whether or not your credit will ever be able to recover.  Thankfully, even the effects of a foreclosure are not irreversible, and there are several steps for those who are trying to rebuild their credit in the aftermath of foreclosure.

Work On Your Payment History: Pay On-Time

 Although it may seem like an obvious step, most people don’t realize the impact that paying their bills on-time has on their credit score.  Your payment history accounts for 35% of your FICO score, making it the biggest single item on your credit report.  That’s why it’s extremely important to make sure you are keeping current with all your bills.  Even if you’re only able to make minimum payments, making sure not to miss payments can have a dramatic effect on your score over time.

Manage Your Credit Lines

It’s a common error to think that when you’re trying to build good credit, you should cancel as many credit cards and other lines of credit as possible.  Not only is this not true, but doing the opposite is often a much better idea.  To attain good credit, you need to have a good credit-to-debt ratio.  This means that you want to have as much open credit available as possible while also paying down your debts.  If you pay off a credit card, keep the line open instead of closing it.  And if you can qualify for a new line of credit, take it.  These will both raise your overall credit availability versus credit use, resulting in a net gain as long as you don’t add additional debt.  It’s much better to have five credit lines that are 90% available with only 10% debt than it is to have five paid-off and closed credit cards.

Enroll In A Credit Restoration Program

The passing of the Fair Credit Reporting Act and other protective legislation made credit restoration one of the best ways to improve your credit score.  Most credit reports contain erroneous, unsubstantiated, or outdated information that can and should be removed from your record, including foreclosures.  In the last ten years, MyCreditHelper’s expert specialists have removed thousands of foreclosures from enrollees’ reports, resulting in higher scores that drastically increased the odds of securing new loans.  Many foreclosures are the result of extreme circumstances, such as a medical emergency or the loss of a job.  You shouldn’t have to live with the consequences of a poor credit score because of a tragedy or misfortune, and with MyCreditHelper, you won’t have to.  If you’ve experienced foreclosure, or another cause of bad credit, call today for more information about how enrolling in our credit restoration program can help you.

Originally posted 2013-09-08 01:08:02.

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