A foreclosed home can hit your credit score pretty hard. To get started rebuilding your credit, it’s time to order your free credit report at annualcreditreport.com, through which the three major credit reporting organizations provide their services. The Federal Trade Commission (FTC) warns that only annualcreditreport.com is authorized to give you a free annual credit report, and you can read more about that at this link.
Once you have that information, you can see where you stand, and you can rebuild your credit by following these tips:
Building a Budget. This may be something that you already do, but if it’s not, now’s a great time to sit down and chart out where your money goes each month. That will help you to know when you can splurge and when you need to save. Given the current economy, saving is probably your better option to protect against unforeseen financial needs.
Pay All Creditors Promptly. Prompt payment of any and all bills is essential to rebuilding credit. If you’re having trouble paying bills, then contact your debtors to work out payment plans that you can handle. If that isn’t an option, you may want to talk with a credit counseling advisor, or you may consider a debt management program.
Keep a Few Credit Cards. You may feel like getting rid of all your credit cards, but be sure to keep a few. Having some credit cards that you pay regularly and completely each month helps put your credit back in good standing.
It’s not easy to get past a foreclosure, but over time, your credit can get back to where it should be. Most things stay in your credit report for seven years, but with careful money management, you may earn a good credit score before then.
