Foreclosures are often financially devastating for those that fall victim to them. Far from the least of the problems that foreclosure will inevitably lead to is the negative impact on the victim’s credit score. This impact can mean poor credit for years to come and affect everything from a car loan to getting a cell phone plan. But not to worry, you can rebuild your life after a foreclosure. So how long will this deficit stay on your record, and what can you do to negate its effect?
A foreclosure will affect your credit score for seven years, from the date of the first unpaid payment. Fortunately, there are things that can be done to counteract the effects of foreclosure on your credit score.
For those who have fallen victim to foreclosure, the hit your credit score can feel like something you’ll never get out from underneath. Fortunately, there are plenty of things that you can do that will help get your credit score back up after a foreclosure brings it down.
The best way to improve your credit is to always be punctual when paying rent, car payments, etc. This will do a great deal to raise your credit score, as this is the most important factor in deciding your credit score. Punctuality in making payments will raise your credit score and get it back up to par long before the foreclosure has been purged from your credit history.
Another thing you can do to improve your credit score after a foreclosure is to minimize your expenditures and hold yourself to a more conservative budget. Cancelling unneeded subscriptions, cooking and eating at home instead of going out and other smart financial and other similarly smart financial moves will not only improve your credit but also prove invaluable in avoiding future crises.
However you tackle your credit woes, it’s important to remember that a foreclosure is not the end of your financial life. It may take months or years, but it is very feasible to recover from the low credit score that a foreclosure may result in. If you remain consistent in paying your debts and living frugally, two years from now you likely could be partially if not completely recovered.