How to Remove A Foreclosure from Your Credit Report

Dealing with a foreclosure is never easy. In addition to losing your home, you face the consequences of low credit scores brought on by foreclosure. This gives you a very difficult time as you try to get back on your feet. A foreclosure can be removed from your report.

Lenders make mistakes and there are times when banks must pay restitution due to mismanaged foreclosures. It is not uncommon to find errors in foreclosure cases. Therefore, having a foreclosure permanently removed is possible.

A foreclosure can also be removed due to lack of available records. This happens when the owner of the mortgage goes out of business. Even if the mortgage is sold to another bank, there is a possibility of errors occurring during the process.

If this happens and the new owner cannot verify your foreclosure, it must be removed from your credit report. After you get copies of your credit report from the three bureaus, go through the foreclosure entries very carefully. If there is any inaccurate information, you can file a dispute. Do not make the common mistake of assuming that all the three credit reports are the same.

The credit bureaus have different methods of filing this kind of information. If the credit bureaus refuse to remove the foreclosure, ask the lender to remove it, citing the inaccuracies. Give them a deadline (30 days). If they cannot verify the information, they might remove it.

You must file three different disputes with the three credit bureaus. How you word each of these disputes is extremely important; otherwise, they will deem it “frivolous”. Your communication and the proof you provide will affect the bureaus’ decision to act on your dispute.

Therefore, it is important to get professional help. When a foreclosure first appears on your report, expect your score to drop 80-160 points, the better the score, the sharper the drop. You may notice an increase in the interest rates on your credit cards as well.

You also might not qualify for new credit. Years ago, it was possible to negate the damage of a foreclosure by completing a deed-in-lieu or a short sale. However, now the implications are the same (although you can qualify for a mortgage after a short sale).

It will take you two years or more to qualify for a mortgage. When you do, you will have to pay a higher down payment and higher interest rates. A foreclosure will remain on your report for seven years, but its effect lessens with time.

The same applies to a short sale. How Does A Foreclosure Affect Your Life? The credit score is used: By employers in the hiring process. In setting insurance rates. In determining approval for utilities. In other services such as the internet and cable. By landlords to screen potential renters