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Foreclosure

When the economy takes a downturn, there are things that can occur which are completely out of your control due to various factors. One of these may be foreclosure, meaning that people are at risk of losing their home. This puts an incredible amount of stress on the homeowner, making it challenging to get back on track financially. On your credit score, you will notice that it has dropped and you have to pay inflated costs for credit facilities that you have. This could be higher interest rates for example.

With a foreclosure, you are likely to lose between 80 and 160 points on your credit score. You could lose even more if you have maintained a good credit record for a long period of time. You need credit repair as after a foreclosure, you may not be able to get new credit for some time. The amount of time that it will take to get access to credit shall depend on the reason that you lost your home. Economic recession gives you some advantage, as you will be able to gain access to credit sooner than if you have made some poor financial decisions.

Steps to Take for Credit Repair

To repair your credit following foreclosure, here are some steps that you can follow: –

  • Discern The Reason for Foreclosure

You should determine the reason that you went into foreclosure so that you avoid a repeat in the future. Moving forward, you may be able to get a better mortgage as you will know what you have to do for a brilliant first step.

  • Discipline over Finances

The next thing that you will need to do is apply some discipline so that you can get back on good financial footing. This means that you need to look at your finances as a whole and ensure that you pay off any outstanding debt. The lower your debt load, the easier it will be to improve on your credit score.

  • Look at the Entire Report

When you are facing foreclosure, you will find that there are numerous issues that appear on your credit report. You need to isolate foreclosure, and then deal with the other issues one by one.

It is possible for a foreclosure to be removed from your credit report, especially if there was some error on the documents. It can also be done if the right procedure was not followed as expected. A professional credit councillor will also be able to determine whether your foreclosure is supported with the right records. When foreclosures are sold from one bank to the next, things slip through the cracks and that could be of benefit to you. If there is any information that cannot be verified on your credit report, then it must be removed.

The best news that you have is that foreclosure is not the end of your credit, although you will have a difficult situation to face. With a professional credit councilor, you will be able to repair your credit and rebuild your work with ease.

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