It is true that short selling your home is going to have a negative effect on your credit. Though the lender is not taking away your home, you are selling the home of your own after negotiating with the lender, it shows your inability to make the payments, and thus, your credit gets hurt after the short sale.
With a short sale, the credit score can lower by 200 to 300 points. It is deemed to have the same effect on your credit just as the foreclosure.
3 Ways To Improve Average Credit Score After Short Sale
There ar
e various ways in which you may be able to improve your credit after the short sale. You will have to follow some real strategic steps or tips in order to better your credit within few months or at least a year. The better you will be able to make your credit, the better will be your option to get new credit or to buy a new home.
However, recovering from the impact of the short sale is not that tough as it is from the impact of a foreclosure. So, what are the things that you need to follow in order to improve your credit after the short sale of your home.
1) You may be able to improve your credit by making the on-time payments on the credit accounts that you already have. The greatest part of your credit depends on the payment history. So, this is going to help you in improving your credit eventually.
2) You will have to obtain a secured credit card in order to improve your credit. A secured credit card is much easier to get as it is actually backed by collateral.
The prepaid credit cards and the secured credit cards are different and so it is important to not confuse these two types. You will have to use the secured credit card in the right way and then make the payments on time. However, before you take out a secured credit card, make sure that the creditor reports to all of the three credit bureaus, otherwise your credit may not improve even with the timely payments.
Don’t overuse the card and never miss payments on the card.
3) In addition to taking out a secured credit card, another thing that is extremely important for you to do is making on-time rental payments (if any), payments on electricity and so on. Though these do not get easily reported onto your credit reports, if you miss payments and if these are handed over to collection agencies they may eventually end up listed on your credit reports. You may not want to further hurt your credit, right? So, go on making the on-time payments on these too.
Furthermore it also becomes important for you to check your credit report from time to time in order to avoid any payment mistakes, or even any kind of wrong listings on your credit report.
About Author: Sophia Gaine is associated with the Creditmagic Community and making regular contributions as a member of the community.
