Improving a credit score after a foreclosure can be a particularly stressful process. After a foreclosure, it can be near impossible to receive bank loans, credit cards, and, perhaps most importantly, rent or buy a home. In a credit-dependent world, improving a credit score can make a drastic change in someone’s life after a foreclosure. Tiffany Bucher, Foreclosure Excess Proceeds founder, has seen first-hand the lasting negative effects foreclosures have on clients and their financial recovery. For many years, Tiffany Bucher and the Foreclosure Excess team have helped clients navigate a foreclosure’s financial strain and recover money owed to their clients after foreclosure proceedings. Today, Tiffany Bucher of Foreclosure Excess Proceedings will discuss how people can help rebuild their credit scores after experiencing a foreclosure.
Identify The Cause of the Foreclosure
Before being able to rebuild credit, a borrower must identify the reason they were previously unable to pay their mortgage payment. Without understanding that reason, the likelihood of debt continuing to increase will remain high. Taking the time to research spending history and total finances will give a borrower a better understanding of the financial situation and prevent future loan defaults.
Pay Bills On Time, Twice a Month
The quickest and most efficient way to build credit is to pay bills on time. FICO scores are calculated by looking at five different categories, payment history, amounts owed, length of credit history, new credit, and credit mix. However, these categories are not evenly taken into account while measuring the final score. Payment history takes priority and makes up 35% of your FICO scores calculation. For this reason, it is essential to pay bills on time each month. To make sure bills are paid on time, many people will set up automatic payments by linking their bank accounts to the bill. However, if the account’s funds are low, this strategy can backfire and go unnoticed for months, hurting a person’s credit score and racking up late fines. To quickly rebuild credit, it is essential to find a dependable, long term payment plan that works for the individual.
Apply for a Secured Credit Card
On average, a foreclosure can drop a credit score anywhere between 100-160 points. Many banks and credit card issuers do not accept borrowers below a 550 credit score; because of this, foreclosures often affect someone’s ability to be approved for a new credit card. For this reason, Tiffany Bucher of Foreclosure Excess Express suggests that borrowers seek out a secured credit card. A secured credit card only requires a deposit and typically has a spending limit that matches the deposit. Secured credit cards are a safe, effective way to build credit while reducing the likelihood of debt.
Tiffany Bucher Foreclosure Excess Proceeds
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