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Posted May 4th, 2012 under Underwater Mortgage

How Homeowners with an Underwater Mortgage Chandler Can Repair Their Credit After a Short Sale

Tags: underwater credit problems Chandler, underwater mortgage Chandler, losing home in Chandler

How Homeowners with an Underwater Mortgage Chandler Can Repair Their Credit After a Short Sale

If you’re struggling with an underwater mortgage Chandler, you may be thinking about either a short sale or foreclosure. Depending on your situation, either of these could be an option for you, but before making a decision, you'll need to consider how each will affect your credit score. Both a foreclosure and a short sale will hurt your credit score (though a foreclosure will have a more negative impact). Unfortunately, you can't really do anything to avoid that. But there are strategies that will help Chandler homeowners repair their credit score following a short sale or a foreclosure.

Don't close existing credit accounts.
A number of factors go into determining your credit score, including the number of accounts you have and the length of your credit history. For example, if you've had a line of credit open for a long time, you shouldn't close that account if you're dealing with underwater credit problems Chandler, since that will be an additional negative mark on your credit history.  

Pay bills promptly.
A short sale or foreclosure is a major black spot on your credit history. Don't make things worse by failing to pay your other bills on time. In fact, continuing to make prompt payments on your other accounts is a critical step to rebuilding your credit history, recovering from your underwater credit problems Chandler, and ensuring that you'll eventually qualify for future loans.

Eliminate other debt.
If you're like many Americans, there's a good chance that you have other debt, such as a student loan, car loan or credit card debt. After you deal with your underwater mortgage Chandler, you'll probably want to take steps to pay down that other debt as soon as possible. A high debt burden can be one cause of a lowered credit score, and eliminating other debts will help you boost your number.

Fix bad financial habits.
As you take steps to fix your credit following a foreclosure or short sale, you may want to take the time to identify, and fix, any bad financial habits. Of course, many underwater homeowners ending up losing home in Chandler because of circumstances beyond their control. But for some people, it's possible that some poor financial decisions made the situation worse. As you recover from your underwater mortgage problems, you should think about what you can do to be financially health in the future, whether that's living a more modest lifestyle, saving more for retirement, or paying down credit card debt.  

Review your credit report annually.
Each year, you're allowed to request one free credit report from each of the three big credit reporting agencies (TransUnion, Experian and Equifax). You won't learn your credit score from your free report, but looking over the report means you'll be able to note and errors or inconsistencies and have them promptly corrected. That's an important step, since errors on your credit report could cause your score to fall even further.

It will take some time likely several years for your credit score to fully recover from the effects of losing home in Chandler. But you can speed up the process by making some smart decisions now. That, in turn will make it easier for you to purchase another home or qualify for loans in the future. To help understand how a short sale or foreclosure could impact your credit score, you can take advantage of of Homeowner 101's Underwater Homeowner Assessment and Action Plan. This assessment will give you important information that you can use to make a decision about your underwater mortgage, so that you can make the best decision for you and your family.