You know “they” say, (whomever they are), foreclosure destroys your credit profile, decreases your score 100’s of points and basically you’ll never own a home again. Sounds like pretty scary stuff right? Personally, I can say living in fear of what “they say” is real. Fear, aka False Evidence Appearing as Real, is based in the unknown. But waking up the morning after my home went into foreclosure in a warm bed, still in my right mind (well mostly), with all my fingers and toes, allowed me to see the other side of the unknown. So I’m here to report, with a little courage, the right information and a plan you could return to homeownership in as short as two years.
So tell the naysayers to take a flying leap, dust yourself off and get busy turning your financial life around!
Here are 4 steps to surviving foreclosure and owning Again:
1. Wake-up and smell the coffee – Surviving foreclosure actually begins before it becomes a reality. As soon as you sense a financial storm brewing, prepare yourself. Start reducing or minimizing your expenses and begin saving more. Sounds like common sense, but many people will continue with the same expenses until the money is completely gone. You may only have to make these changes temporary but this will put you in better position and give you more options.
2. Tell your story- When it’s time to re-build, creditors will want to know your story in detail. Creditors understand life happens, but your circumstances have to demonstrate clearly why you could not pay your debts. Document your credit report with a statement of explanation as to your circumstance. Keep all records and notices to create a timeline of your financial story.
3. Mix the bitter with the sweet – If possible, keep a few accounts in good standing. Maintaining positive payment activity can help to offset the negative activity. If your current banking relationship is “going south” due to your debts, start a new one before your “bad banking relationship” is reported to the ChexSystem. Maintaining a positive relationship status with a bank will assist you in the rebuilding process and keep you from the extra expense of using check-cashing centers.
4. It’s only a fall if you don’t get up – As soon as your able, begin paying your debts on time and bring down your balances to 30% of the credit card limit. Keeping your credit card balances below the limit and closer to 30-50% of the limit demonstrates your ability to properly manager your debt and starts the credit re-building process.
Was this news to you? How could you make these steps work for you?
See you soon!