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How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

Here is an article that answers the question many Americans ask,  

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 

More consumers filed for bankruptcy or lost their homes in the last three years than ever before. Many are in line for a similar fate as the economy enters a double dip. In the end, consumers are left staring and wondering

The good news is a badly battered credit score isn't a life sentence. It will take seven to 10 years before your credit is better, unless you become delinquent again. Here is an outlines of how to fix your credit, starting with steps to take before your credit crisis.

 

 

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 

If default looks imminent, cushion the blow to your credit score by defaulting on just one account. "There is a component in the FICO score called prevalence. That means having five collections is worse than having one. Let the account with the highest monthly payment fall behind to free up more money every month to pay your other debt obligations. If you have to choose between debts to pay, skip the credit cards because it's unsecured and a creditor can't repossess anything. Credit card delinquencies hurt credit scores less than bigger debts i.e.; home or auto loans.

 

 

 

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 

If you can't mitigate the crash, don't worry. Take a breather after the event, before mapping out your entrance back into the world of credit.  If you have other outstanding delinquencies, catch up on those payments. If you still face looming debt out there, work on reducing it…the key is time. You won't be able to qualify for credit immediately, give it a few months.

 

 

 

 

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 

You need to know how to fix your credit using new credit accounts. A secured credit card is the first and only type of How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?credit available to someone with a blemished credit history. These cards require a security deposit, usually a minimum of $500, to activate it. The deposit is placed in a savings account, money market account or certificate of deposit. If you make on-time payments, your bank might convert the card to an unsecured card after a year. You need to make sure the issuer reports to the credit bureaus, otherwise, your efforts will be for naught. Make a call and ask if they report to all 3 bureaus….Very, Very important!

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 

Another way to build your credit is to piggyback on someone else's card accounts. Ask a family member or your spouse to consider adding you as an authorized user on their credit card. You will benefits from the cardholder's payment history. So, make sure you choose wisely. A side note: Experian only includes authorized user accounts if the payment history is good.Checking with your bank or credit union to see if overdraft protection on your checking account is reported to the credit bureaus. Sometimes, it is considered an unused installment loan on your credit report.

 

 

 

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 

Lenders love to see recent good payment behavior, so pay your bills on time and keep balances low. Aim to pay off How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?credit card balances every month to keep debt from snowballing out of control. If you're a carrot-and-stick person, consider a credit monitoring service to keep you motivated. It's important to check your credit score periodically, especially when you're in the recovery phase.

 

 

 

 

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

 Unfortunately, knowing how to fix your credit is only half the battle. The time it takes to rebuild your credit depends on the event and where you started. Borrowers with lower credit scores experience a smaller drop in their score after a huge credit event compared with those with great credit.If you get a mortgage modification after being delinquent on your home loan, it could take as little as nine months to lift a credit score of 625 to above 700 if all debts are brought current. I found this information from VantageScore.Stay on top of your new creditRestart your creditGive yourself timeAnticipate your credit catastrophe

 

 

How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?The effects of foreclosures linger longer. Your credit score will start to rebound in as little as two years if you keep all other accounts in good standing.The road back from bankruptcy is longest, either seven years for a Chapter 13 bankruptcy or 10 years for a Chapter 7 bankruptcy. That doesn't sound good, but all is not lost."The severe impact from a bankruptcy occurs in the first two years and will roll off from there. If you consistently pay on time, in two to three years, you will get into a reasonable score range again.

 

 

Free for your reference below are down loadable pdf files of waiting periods for specific credit events. Please feel free to post any question concerns or ideas on;  How do I repair my credit after Foreclosure, Short Sale or Bankruptcy?

Waiting period for Conventional or FHA funded loans 

Waiting period for VA and USDA funded loans



Becky Sorensen
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