A good credit rating is vital to financial health. Your credit score will determine the interest rate when getting a loan, the limit and interest rate for a credit card and may even affect your ability to get a job. Facing a foreclosure is bad enough. It is likely to give your financial standing a thorough beating. Your credit rating could fall by between 300-400 points. However, there is a way to still salvage it.
1. Keep The Existing Lines Of Credit
Most credit card companies are likely to close your cards when they discover that you have defaulted on your mortgage. However, it is not all who take this step. You may still have access to financing though it will be more expensive and with more restrictions. The few existing lines of credit are extremely valuable. Keep them as healthy as possible. The companies will threaten to close the lines or raise your interest rates. The best approach is to call them with a detailed explanation as well as a promise and plan to rectify the situation. As long as you meet your obligations, most companies will leave you alone.
2. Use A Secured Credit Card
This is a card whose limit is secured using a deposit in a bank account that you cannot access. The challenge is that these cards are expensive to obtain. You have substantially high application fees, billing and annual fees. However, if you are committed to maintaining a perfect repayment history, your credit ratings will improve.
3. Go To The Local Credit Union
There is a reason why many people love and turn to local credit unions when they are in financial difficulties. To begin with, they only lend to members. This gives them a better sense of your financial cash flow. With your banking history, they will consider you a lower risk client and thus extend the facility you are looking for. The union will focus more on your incoming cash and what is going out and then disperse cash on this basis. This will improve your score over time and may in fact help you to overcome the foreclosure.
4. Work On All Monthly Payments And Debts
What negatively affects your credit score most is late payment. When one line is closed, it is important to improve on all others to keep them open. Focus on clearing debts and bills that remain active. Create a long positive repayment history. The referencing bureau will take note of the positive trend on other lines and thus be willing to revise your score. Personal lines of credit, credit cards, car loans will be used to plead your case. Even simple and localized bills like gym, internet and cell phone services will determine your long term credit health. It is also advisable to wait until the ratings improve before applying for another credit facility. Though your rating will not return to its previous position over some time, creditors are ready to overlook your distance past in favor of the current position. You will need to actively work on your rating by planning for a more positive financial future after foreclosure.
5. Sell Your Home Through An Accredited Cash Transaction
If you have exhausted your other options, don’t have the money to make any more payments, or simply want a smart, fast and easy solution for your home loan troubles. There are a number of companies that buy houses fast but not all are the same. We have a list here of the top five home buying companies in your area here. If you’d like to receive a fast and free home offer from the top company on our list, navigate to BuyMyHouseToday.com. The difference between this company and the other companies is while the other companies offer only one option, a discounted cash offer, BuyMyHouseToday.com offers over 20 different options to customize a solution to your timeline and your bottom line. They can give you a great competitive offer on your home allowing you to close in as little as five days. And they will work with whatever issues you have to save you from foreclosure and give you what you need to feel comfortable in your next steps.
With these five steps, you’re on your way to better credit and a brighter financial future!