Everyone knows that when you lose your home through foreclosure, your credit
is going to take a hit. It is going to be visible on your credit report
for years to come. For this reason, you really should do everything that
you can to stop the proceedings. You might be able to talk to your mortgage
company to find a way to keep your home. Though it might not feel like
it, they want you to stay in your home also. Foreclosure proceedings are
costly for them too!
If you have already gone through (or are going through a foreclosure),
here are some ways to help to improve your credit.
First of all, you have to figure out what went wrong. Why were you struggling
to pay your mortgage? Did you take a pay cut with a new job? Did you lose
your job? Were you spending more money than you made? By figuring out
what mistakes you made, you can make sure that you don't make the
same ones again.
If you are in debt, start working hard to pay these off. Though debt can
be overwhelming, now is the time to get rid of it. The best way to do
this is by paying off the highest interest debts first and then work on
paying off the rest. To get this done sooner, you might find some expenses
that you can cut back on. If money is truly tight, a second job can help
you get rid of your debt quicker.
Get your debt-to-income ratio back to a manageable amount. Mortgage companies
and other lenders like to see a debt-to-income ratio. If you have no debt,
they might wonder if you can handle it. If you have a small debt-to-income
ratio, it shows that you are managing your money wisely. The goal is to
get below 35 percent.
It takes time to improve your credit score after a foreclosure, so you
need to learn to be patient. You are not going to go right back out and
buy a home. Instead, you are going to have to continue to show creditors
that you can handle debt wisely by paying off your credit cards and other
debts on time. However, with the right dedication, you will get back on
Contact us for all of your legal needs.