What can I do after a foreclosure to fix credit?

[JoJoMonkey]

Recently my husband lost his job and as a result our home was foreclosed on. He has recently returned to work, but that obviously doesn't change what has already happened. However, I can only assume that this has just destroyed our credit rating. Is there any way to remove this from our credit reports? And if not, is there anything that we should be doing to regain our good scores because we would like to buy a new home eventually?

[Japhet11]

Hi JoJoMonkey,

Great screen name by the way. The truth is that the foreclosure is going to hurt your credit rating. The fact that this was probably a direct result of your husband losing his job isn’t going to matter to lenders; they see that foreclosure and think that you were living beyond your means.

However, that is not to say that you can’t rebound from this a lot quicker than you may think. I know your main concern right now is how to fix credit since the foreclosure is complete, but really what you need to address is how to change your whole financial perspective.

You’re going to need to pay off any other outstanding debts that you may have, you’re trying to sort of “start fresh” and demonstrate to lenders that you have been exceptionally responsible since the foreclosure. You’re also going to want to budget and save. Having money for a rainy day is going to help when unforeseen problems occur in your life.

You’re going to want to establish new credit to show that you can have credit and use it sensibly. This means keeping your balances low and paying your bills on time every time.

If you have any other questions, please let me know. Or if you would like a free consultation where we can discuss your specific situation, please check out MyCreditGroup.com.