A recent advice column in the Arizona Daily Star offered advice to consumers who have experienced a property foreclosure.
The most important aspects needed for credit score improvement following foreclosure, according to the column, are time and positive information. Consumers should begin using old credit cards again for small purchases, taking care not to suddenly run up high balances, and then take care to make any required monthly payments. In doing so, these accounts will show positive progress and make the cardholder more attractive to potential lenders.
Also, having a diverse portfolio of credit accounts on a credit report is preferred by lenders. Thus, opening new types of accounts not already present to ones credit report, perhaps adding a department store card, for example, can be helpful in rebuilding a credit score. However, this step can be tricky for those undergoing a foreclosure. Consumers need to ensure they can handle more debt before agreeing to take it on.
Using these tips to boost a credit score can help a consumer obtain better interest rates for future mortgages as well. If a consumer has a high score, a lender will be more willing to extend a better rate, as he or she is viewed as a responsible borrower.
However, even if consumers are able to boost their credit scores, they should continue to monitor their credit reports, as any inaccurate or unverified marks could unfairly reduce their three-digit numbers. Rather than settling for a lower score, some individuals may want to work with a credit repair attorney to investigate and dispute the marks in order to regain the clean credit standing they deserve.