Cleaning your Credit Record After Foreclosure

The general belief is that any foreclosure of your bad debt would remain on your credit record for a minimum of seven years. This is not true, in fact unless it leads to collections, the derogatory information on your debt would remain there for a maximum of seven years. You can actually get it knocked off the record earlier than that too.

First and foremost, you must understand that putting a missed payment on the credit history is completely left to the lender. Hence, if you have had a good track record or share good relations with the lender, your missed payment may not even feature in your record. Since the lenders have the right to foreclose your bad debt, they also have the right to get rid of it.

While looking to clean up your credit record, it is always good to try and strike a deal with the lender. Try and negotiate a deal with the creditor where you pay up the remaining amount under some mutual understanding and in turn the lender knocks off the record from your credit history. This would get you in the good books of the lender as you repay the loan and it also boosts your credit ratings. Even if you avoid this lender in future you can get other loans easily and on better terms, hence this is always worth a try.

You can also try to dispute the foreclosure with the credit bureau. Some of the common causes of disputes are:

• A fully repaid debt still shows in your
• Debt was not raised by you in the first place (identity theft)
• Information in the record is incorrect, etc.

These are valid reasons if you have the documentation to support your claim. With the proofs you must send the dispute letter. Typically, your first request would be rejected as invalid or due to insufficient documentation. Don’t get disappointed, these are typically tricks played by the credit bureau to get you off their back. Investigating these records is time and money consuming and the companies don’t want to be doing that. But you need to be persistent and keep following up. Most times you should be successful and they would carry out an investigation. If your claim is right your credit record would be rectified. Sometimes, if you are lucky, with the large number of defaulters due to the housing loan crisis, even a faulty claim may get accepted and you benefit from the exercise. But never bank on that to save you always.

If despite your best efforts it does not work, you need to look at credit repair alternatives. If you spend sufficient time on understanding the various concepts of credit ratings, you can repair your record yourself. A simpler alternative is to approach an expert – a credit repair lawyer. They are trained professionals that know the rules and laws of credit reporting very well. If there any chance of cleaning your report, they should be able to do it. Being well versed with the changing rules and credit laws, these lawyers can help you in many ways. If your case is genuine they can even go to the court to help you get the foreclosure off your credit record.

So you see, your bad debt foreclosures need not be on your credit records forever. With initiative from your side you can clean your records.