Foreclosure is a common subject these days, but there is life after having one. If you have recently had a foreclosure on your credit report, you will be able to recover from this bad experience. Fair Isaac with its new FICO 08 with due time will forgive you for a foreclosure as long as you are not a repeat offender. This new calculated risk software understands that unfortunate situations come up in ones life, but don’t make the same mistake again. Definitely don’t make it a habit of having credit problems is the point.
How long will it take before you can buy again?
Your credit report might recover quickly as long as you have other good standing credit reporting on your credit report. But that does not mean you can buy a home right a way. Most people that have foreclosures usually take time to recover from such a bad experience. HUD knows this, and that is why you cannot get a FHA loan for a minimum of three years from foreclosure date. It’s almost impossible to get a Conventional loan, because conventional loans are automated approvals. Typically with a foreclosure, collections or low scores this automated software will deny you. FHA is a different type loan all together, since it’s a government insured loan you can get what they call a manual underwrite for this type of loan. What this means is if the automated process through Freddie Mac or Fannie Mae says no, you can get an underwriter to manually approve the loan. So you can expect to wait at least a minimum of 3 years after foreclosure date before you can begin to think about financing a home again.
Pay everything on-time
When a bank lends you money, it’s a big risk. Banks don’t want to lend money to someone that has total disregard for their credit. If you have had a recent foreclosure the last thing you want to do is have late payments, collections or any other negative information hit your credit report. Let’s face it, the whole reason banks, mortgage companies, car dealers, landlords, and employers pull your credit report is to see if you pay your debts. I personally would not lend to someone that did not pay their bills back, would you? With the recent tightening up in the lending arena you might want really work on increasing your credit score. Also make sure you have at least 3 lines of credit reporting on your report. If you had to let everything go, you might consider getting a secured credit card. This type of card will help you re-establish your credit.
Save Money
Saving money is very important when it comes to getting a loan. Lenders like to see you saving money because it shows stability. Let’s assume you loose your job, well if you have 6 months payments in the bank you are less likely to let your house go. If a emergency comes up you have some money in the bank to assist in some way. Saving money also shows you are responsible as well. Let’s say two people go to the bank to get a loan and they both have bad credit. The main difference between the two bad credit borrowers is one has $5000.00 in the bank. Who do you think the bank is more likely to approve? These are some key point I wanted to touch on to revive your credit after a foreclosure. There is life after so make sure you manage your credit report and credit scores so you can begin home ownership soon.
CreditScoreQuick.com
Fantastic guidelines and just the plain truth. Check your report atleast one time each year free at AnnualCreditReport.com and make sure there are no errors. My folks went through a forclosure and continued to pay other bills on time. They were able to qualify for a house within 2 years. Every case is different.
Online credit reports can be used to help you get control of your financial life. You can learn about your debt, manage your debt and clean up your credit report by using an online credit report.