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You experience damage through negative items on your credit report and a lowered FICO. You cannot do much about correct items \u2013 most mortgage problems linger on the credit report for up to seven years. However, you can begin to reverse a lowered credit score sooner. FICO scores range from 300 to 850, with 680 generally serving as the dividing line between good and not-so-good credit. A negative mortgage event can drop a good FICO score 150 points or more; paradoxically, low scores suffer less. Lower scores also have faster recover times. For example, if you had a 680 score, you might fully repair a short sale \u2013 when your lender agrees to lose money by letting you sell your house for less than you owe \u2013 in about three years. In contrast, a score of 720 might require a seven-year recovery period. By taking positive actions, you can start the healing process sooner.<\/p>\n
Look for mistakes on your credit reports, like payments incorrectly labeled as late or missed, as well as charges you don\u2019t recognize. Financial adviser Frank Porschinger says, \u201cThe three major credit bureaus provide you with free copies of your credit reports \u2013 study them carefully.\u201d To fix an error, contact the credit bureau directly, identify and discuss the error and ask for correction. Use certified mail with return receipt requested to send documents that support your claims. Also, communicate with the creditor in question and send them the same information. Expect action from the credit bureau within 30 days, although it might take up to three months to fix problems with the creditor.<\/p>\n
People who pay their bills on time without fail will stand the best chance of improving their scores. Porschinger points out, \u201cYou can build up your credit score by paying your bills on time. You might be able to set up an automatic bank draft arrangement with your utility providers and others allowing them to debit your checking account every month for the amounts due.” You can use your personal finance software to set reminders of when your bills are due and pay them automatically. Clean up any past due payments right away. Don\u2019t attempt to \u201cpay off\u201d debts by shuffling them back and forth from one credit card to another just to delay payment \u2013 instead, consolidate credit card debt on the lowest-interest card. Don\u2019t be too quick to close out your less-used credit cards \u2013 having fewer open account may actually lower your score. Conversely, don\u2019t open a bunch of new accounts, since this too can lower your score.<\/p>\n
If you have no credit cards, try to qualify for at least one. If you can\u2019t get a normal card, then a lot of companies offer prepaid cards that you refill by adding funds every month. You can also try to obtain a secured credit card that requires you to maintain a minimum deposit to offset the risk of default. If you repeatedly get turned down for this type of card, then stop trying after the second or third try, because applying too many times can also hurt your credit. Once you have a card, it\u2019s time to start “card-grinding,” which means using it minimally to pay for normal, daily stuff, then repaying the full balance during the same month that the debt was incurred, before interest accrues.<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
Damage Assessment After a Bad Mortgage You experience damage through negative items on your credit report and a lowered FICO. You cannot do much about correct items \u2013 most mortgage problems linger on the credit report for up to seven years. However, you can begin…<\/p>\n","protected":false},"author":17,"featured_media":1843,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"","_seopress_titles_title":"How to Recover Your Credit After a Bad Mortgage | Quicken","_seopress_titles_desc":"Damage Assessment After a Bad Mortgage","_seopress_robots_index":"","inline_featured_image":false,"footnotes":""},"categories":[110],"tags":[],"class_list":["post-1842","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-credit"],"acf":[],"jetpack_featured_media_url":"https:\/\/www.quicken.com\/blog\/wp-content\/uploads\/2022\/08\/89967634_XS_1.jpg","_links":{"self":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/1842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/comments?post=1842"}],"version-history":[{"count":1,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/1842\/revisions"}],"predecessor-version":[{"id":1844,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/posts\/1842\/revisions\/1844"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media\/1843"}],"wp:attachment":[{"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/media?parent=1842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/categories?post=1842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.quicken.com\/blog\/wp-json\/wp\/v2\/tags?post=1842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}