Make the right moves after foreclosure

Surviving and thriving after a foreclosure is possible even if you can’t picture it. The certified housing counselors have some advice for anyone looking to move forward after foreclosure.

Get Plan B in place as quickly as possible

Ideally, you want to start preparing yourself and your finances before the foreclosure is final. If you take action from the moment you get the first notice the bank intends to take possession of your home, then you can get to a point of recovery faster.

If you’re not paying your mortgage, chances are you have extra money. Make sure you’re sticking that extra cash somewhere so you can get housing after you get the eviction notice.

It may not be easy to find a rental if potential landlords check your credit and find a foreclosure. You may fare best with a private party rather than a rental company, he said.

An individual landlord may be willing to take a chance on you. They may ask for an additional deposit or that one of your family members to co-sign your lease.

Consider turning to the government for help.

Some options are available at

Another possibility is Freddie Mac’s REO Rental Initiative. This is a temporary program that allows qualified, former owner-occupants and tenants the option to rent properties they live in that have been acquired by Freddie Mac because of a foreclosure. Visit and put “REO Rental Initiative” in the search box for more information.

Tips for getting back on your financial feet after a foreclosure:

    • Sit down and understand what brought you to that point. Take time to learn from past mistakes.
    • Figure out a budget. You should have been doing this all along, but most people don’t. It should say what income you have coming in and what expenses you have going out. Try to figure out where you can save money. Even if you come out ahead every month, every budget can be sliced a little bit.
    • The best way to rebuild your credit will be to pay whatever bills you have on time — and not to take on much additional debt.There are lenders who will give you money [after a foreclosure]. Within a month they’re offering you car loans and new credit cards. But if you ended up in foreclosure because you couldn’t control your spending, consider whether you’ll really have a sudden ability to rein that in.There are other ways to rebuild your credit, he said, including using secured credit cards and small loans.Secured credit cards function as traditional credit cards do, but the spending limit is based on what is in a separate bank account you set up for the card. Paying off the card each month will improve your credit record.

      Over time, once you show a good record of doing that, the bank will extend you some additional credit. That is reported to the credit bureau.

      Small loans from the bank works the same way — you borrow your own money, but the transaction appears to be a loan — can also give your credit score a boost if you make payments on the loan. Those on-time payments will also be reported to the credit bureaus.


  • Check your credit reports as often as you can. Six months after the foreclosure (or bankruptcy, or both) check your credit report at no charge from one of the credit bureaus at or by calling 877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. (Beware of impostor sites that take advantage of a misspelling or ask you to sign up for any kind of service to get your report.)


This is the only place to get a free credit report with no strings attached. Six months later, go back and pull a report from a different credit bureau.

Make sure those credit reports are accurately reported. If they are not, go through the dispute process and clean up the report.


  • Beware of companies that claim they can have the foreclosure erased from your credit report. Foreclosures generally stay on your credit report for at least seven years. A Chapter 13 bankruptcy — allowing the debtor to keep property and pay debts over time — also stays on your credit report for about seven years. A Chapter 7 bankruptcy filing — involving the sale of a debtor”s nonexempt property and the distribution of proceeds — lives there for 10 years.


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