How to Restore Credit After Foreclosure
Don’t think your days of home ownership are over once you experience a foreclosure. Quite the opposite--you can restore your credit after a mortgage foreclosure and qualify to buy another house in a few years. Regardless of the reason for your foreclosure--loss of job, medical bills--you can fix your credit once you get back on your feet financially.
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Instructions
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Reduce your existing debts. Low credit scores result from foreclosure, but paying off your remaining debt and carrying a zero balance on credit cards can help counter the negative effects and improve your score.
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Be sure to pay all your bills on time. Slowly restore your rating with on-time payments. Pay student loans, auto loans and credit cards each month before or on the due date.
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Make sure your credit report is accurate. Now’s not the time to ignore credit report mistakes. Removing one erroneous remark can boost your low rating. Order reports online from Annual Credit Report and thoroughly check each line for accuracy. Contact creditors to challenge errors.
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Use inactive accounts. Credit scores can plateau if you refuse to use credit cards altogether. Occasionally pull out your credit card to make an inexpensive purchase. Your accounts remain active, and this ensures regular updates from your creditors.
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Attack delinquent accounts. Dig into your past and contact old creditors to see if you can pay off your delinquent accounts. In exchange for a complete payoff, talk with an accounts supervisor or manager to see if they’ll update your credit file and remove the past due or delinquent notation.
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References
- Photo Credit credit card numbers image by Yury Shirokov from Fotolia.com
