If you’ve fallen behind on your mortgage payments and lost your home to the lender, you’re probably already in the midst of financial struggle. Afterward, a foreclosure can further decrease your credit score. However, with a bit of patience and restraint, it is possible to bounce back and boost that three-digit number. Use the following tips to start rebuilding your credit after a foreclosure.

3 Ways to Strengthen Your Credit After a Foreclosure

1. Avoid Closing Old Accounts

The longer you have lines of credit open, the more trustworthy you are seen in the eyes of lenders. If you close your oldest accounts, the overall age of your credit history will revert to the next account you opened, and a younger credit history often generates a lower score. Therefore, even if you’re trying to avoid spending on credit cards, it’s crucial to keep those accounts open. Instead of shutting them down, just restrict yourself to 30% of the total card limit or less. 

2. Apply for a Secured Credit Card

After a foreclosure, you might have trouble getting approved for new lines of credit. However, that’s probably because you’re applying for unsecured credit cards, which are the standard option.

With a secured credit card, you’ll be required to put down a deposit that’s equal to the spending limit offered by the creditor. This way, if you fail to make on-time payments, they can simply keep your deposit. This leverage component makes it much easier to get approved for a credit card, raise your credit limit, and boost your score.

3. Opt for Automatic Payments

A best way to maintain and gradually build your credit score is to repeatedly make on-time payments for your credit cards and loans. If you have had trouble keeping up with due dates in the past, it may help to sign up for your creditor’s auto-pay feature.

This will immediately take the funds from your account when they’re due, so you never fall behind on your minimum payments. If you want to make additional payments after the minimum is met, you can do so manually.

Dealing with the aftermath of foreclosure can be a challenge, which is why Padgett & Robertson, Attorneys at Law is happy to offer guidance to clients throughout Southern Alabama. This Mobile-based firm offers debt relief guidance for those dealing with student loan or credit card debt, including help with bankruptcy and foreclosure. With their personalized approach and flexible scheduling, credit score improvement is well within your abilities. To learn more about their skills, visit the website, or call (251) 342-0264 to schedule a free consultation.

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.