3 Tips to Repairing a Past Foreclosure

If you have a past foreclosure, you will need to take steps to repair your credit in order to get a new home loan. While time is the greatest cure for credit woes, there are some things you can do to expedite the repair of your financial standing.

Close Loans Successfully

You should aim to close the majority of your installment loans prior to seeking a new home loan. It is good to have some open credit lines, but close any debts you can do without. Instead of modifying, settling or consolidating, pay the loans off on time so they will be reported as zero balances.

Reduce Credit Balances

Reduce all of your balances to less than 10% of your available credit. This will immediately boost your credit score and reduce the total debt reflected on your credit report.

Increase Income

Your debt is not the only factor considered for your home loan; your debt to income ratio actually has a greater bearing. So, decreasing your debt is only half of the equation. Take steps to also increase your income, such as securing a part-time or contract job, in order to improve your ratio even faster.

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