A foreclosure will be a damaging mark on your credit score for years, especially if you are in the market to buy another home. However, if you have a bad credit score because
of a past foreclosure, it doesn't mean that you can't take some essential steps to help improve your credit now so you will be able to purchase a home again in the future.
During the first couple of years after a home foreclosure, lenders will not generally approve you for a new mortgage loan. However, this will give you the time to straighten out your finances and repair
your credit.
There are some steps you can do to improve a bad credit rating. Make sure to pay your bills on time and keep open a least two major credit cards to build a new solid credit history. Lenders will want to see a dependable track record after your foreclosure. Mortgage lenders will review the last three years of your credit history so it will be important to document
in writing why you have a past foreclosure on your credit report.
When it comes time to buy your new home, you will need to have some savings to use for the down payment. The mortgage interest rates you may receive, after a foreclosure, will be high. These rates can be
up to three or four percentage points above current market rates. You can improve your chances of getting approved with a lower rate by putting 20 percent down.
Patience is necessary to improve your credit rating and to save for a down payment. If you draft a budget and pay your bills on time, you will be on the road to home ownership again.
You may want to also read Stopping A Foreclosure On A Home