Sigh! If only you had asked before the short sale was finalized. However, you might still have some luck with the lender in asking that the amount of the bank's loss be removed from your report.
Here are some suggestions and an answer supplied by Yahoo that is very specific to your situation:
Hope that helps. And by the way, I do hear that a short sale is better than a foreclosure, though one of these articles takes issue with it. I would say your discussions with having the bank remove the dollar amount on the short sale might be enhanced by reminding them you chose the route that would cause the bank and the neighborhood minimal damage.
Best of luck to you, Dana.
PML of Longmont, CO
720 810 0683
So how do you repair short sale credit damage? It doesn't happen in a snap, but there are ways to go about it.
The first thing to keep in mind is that it's your lender, not you, who can remove the short sale from your credit report. The particulars vary from state to state, but short sale credit reporting is generally allowed for up to seven years. Your lender can choose to remove it sooner, but not later. Short sale credit repair often involves negotiating with the lender to clear the record, usually when the score itself has rebounded enough to merit good rates.
Negotiating with your bank
Experts say the best way to negotiate short sale credit repair is to point out that the short sale benefits both parties. Since you didn't let the house go to foreclosure, you do them a favor by taking on the responsibility of selling the home yourself. You may have suffered the short sale credit damage, but in the process you saved your bank thousands of dollars in foreclosure costs and the pressure of having a nonperforming asset in their checkbooks.
Of course, itâ€™s always better to find out what short sale credit damage to expect before completing the deal. Ask your bank how they will report the short sale and try to get them to do otherwise. Or if this isn't an option, ask about short sale credit repair options for after you've closed. Most banks will have credit improvement programs for clients, and since youâ€™re working in their favor, theyâ€™ll be more than happy to show you your options.
You can start taking steps towards short sale credit repair as soon as the home is sold off. As soon as you're able, start taking out minor credit and make sure to keep them current. You may not qualify for optimal rates just yet, but each payment you make counts toward your credit score and reduces short sale credit damage. Over time, the little points add up and your short sale credit will be back in the positive zone.
In general lenders overlook medical debt. Good luck to you.
We have a "2nd Chance" portfolio loan that would allow you to buy again right after a Short-Sale or even a Foreclosure... The requirements are pretty simple, you must have a 20% down-payment and at least a 620 Mid FICO score. You can contact me on my website for more info..
I would recommend connecting with a local mortgage lender. They can advise you on exactly everything you need to do in order to buy again in a short period of time.
Wishing you the best.
Syan Real Estate
Call/Text: (505) 730-8181
New Mexico Real Estate: http://www.syan.com
- Keep a record of your utilities payments (internet, phone, etc) provided that you also paid them on time.
- Negotiate with your lender so the short sale will be cleared from your record.
Good answers below. Also:
1. Keep records of all of your lines of credit and pay them on time
2. Pay your rent on time and keep the receipts from landlord.
3. Keep credit card debt down under half of available balance.
4. Pay all utility bills on time and keep the records to show consistency.
5. Make solid payment arrangements on your medical bills and pay on time.
Finally, keep up the good work for 2 - 3 years and you will be back on track to qualify for another home loan. Be encouraged. All is not lost. All the best moving forward.
Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
It requires you have knowledge of the HIPAA law as well as FCRA (Fair Credit Reporting Act), and be ready to write some letters and take action. It can be a bit tough to do that research on your own, so a very nice person, named "WhyChat", decided to take it upon themselves and compile all of the information that is needed on a website at http://whychat.5u.com/hipltr.html - including the legal basis (violations can be pursued by the state attorney general's with annual per violation fines up to $1,500,000 - talk about motivation to comply with the law), step-by-step instructions, links to attorney's opinions and even sample letters for you to copy/use on your own. This process has a very high success rate. I've seen over 15 medical collections deleted from someone's report that way, scores increased over 110 points.
When you are dealing with medical collections, being familiar with HIPAA & FCRA is like going into battle with a bazooka when the collection agencies have a butter knife.
As far as rebuilding your credit, you will want to make sure you have open & active trade lines on your credit report. You should have, in my opinion, at least 3 revolving trade lines (like credit cards, retail store cards, etc.) and 2 installment loans if you need them (like a car, student or personal loan), or if you don't need an installment loan (since it requires a payment each month) then at least 5 revolving trade lines. Utilize the credit cards for normal purchases (gas, groceries, etc.) and pay them in full or (very close to in full) every single month. Right before you apply for any credit, for a maximum score increase, make sure they are reporting $0 balances (you can do this with a monitoring service like TrueCredit.com)
You can read the details on how what factors contribute to your credit score at http://www.myfico.com/crediteducation/whatsinyourscore.aspx
Remember it takes time and there is no quick fix. In fact, quick fix efforts can backfire.
You can read, learn, and implement different methods and approaches to Rebuilding Your Credit by browsing through the forums at http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/bd-p/
Rich Plasmeier Great Way Real Estate 303-931-4155
You first need to settle the debt that is owed. If the debt is no longer owed that you do not have to pay it, meaning the statute of limitations has expired and the creditor did not secure the debt.
Next you will want to work on cleaning up your credit reports through credit repair services.
Next you will want to establish credit so that you can prove you are good with credit and debt servicing.
After your credit is in good standing, you then contact a mortgage broker to see how much house you can afford. Thereafter, you begin looking for a home with the Realtor of your choice. I know this is all very boring, but if you proceed this way you will set yourself up for success long term and will not have to go through another short sale or foreclosure in the future.
Hannah Fliegel, FICO Pro
Suz from Boulder has very good information below. I too know a couple of very good lenders who are doing everything they can to help people rebuild their credit and also help get things removed from the credit report that don't belong there. Let me know if you want their contact information. Whatever you do, it's best not to put it off. Having them look over your credit now may save you some big headaches down the road. Just out of curiousity, how long did your Short Sale take to close? Was your bank responsive with your Realtor? Would you recommend to the many people who may be reading your post that they do a Short Sale instead of a foreclosure?
The Kinslow Team LLC
Suz has some good links listed. I would add one more: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt063.shtm
This website tells you how to opt out of receiving credit card offers. All those offers aren't helping helping your credit either. And I would definitely agree that speaking to a lender can help guide you in the right direction. If you'd like some references of some great lenders, I'd be happy to send them to you.
If you still have credit cards, we start here. Think of items you pay for out of pocket every day. Lets say Gasoline,
you use $50 each week, Take $200 and put it to the side, you'll need it later. Take card in hand an d buy gas with the same card each week, and pay that card at the end of the month with the $200 you put aside for Gas. Have other cards, buy some groceries, lets say you spend $150 a week on Food, take one week and put it on a card, take the $150 you would have spent and use it to pay that card. This will put positive activity on you card, If you cards have more than 1/3 of the credit used up, pay down the card and keep the balance at just 1/3 on each and every card if you don't have enough then let the balance on the card come up to 1/3 it will help build your points also. Miss no payments. Have your credit scores sent from all three major companies and make sure all items on your reports are accurate, if not remove inaccurate information. Credit will rise within a few months of you doing the right thing. no new toys, no new cars, no new expensive play things, vacations or the like, you will be able to reward yourself later when the scores are higher and you can again flex some financial muscle!