Reviving Your Credit Score

Four steps to rebounding after foreclosure

Choose credit wisely. Once you’re paying bills on time every month, start rebuilding by taking on two types debts you can afford:

–Revolving credit/credit cards: Consider a secured credit card. It’s a money loser in the short run. You’ll have to save $500 to secure the card and pay as much as $200 a year in fees. But you’ll get a credit card faster and, if you can afford it and pay on time every month, you may find the card rolled over into an unsecured credit card after a year. That’s better for your credit score.

–Installment credit/car or other loans: You probably won’t qualify for a home loan for at least three years, Morris says, but you can still look for other forms of installment loans. If you already have a car loan, concentrate on paying it on time every month.

If you don’t and want to reestablish your credit quickly, consider a secured loan, says Wayne Sanford, president of the New Start Financial Corp. in Allen, Texas. Here’s what you do: Borrow up to $1,000 total from family and friends for one week. Then ask your bank for a secured loan. Once you have the loan, repay your family and friends, and then pay that loan every month.

The key is that you know you can afford the monthly payments, Sanford says. There’s no point trying to reestablish your credit if you can’t pay on time and in full every month.


1. I Will Live Within My Means
2. I Will Maximize My Income Potential Through Education and Training
3. I Will Effectively Manage My Budget, Credit, Debt, and Tax Obligations
4. I Will Save At Least 10% of My Income
5. I Will Use Homeownership as a Foundation For Building Wealth
6. I Will Devise An Investment Plan For My Retirement Needs And Childrens’ Education
7. I Will Ensure That My Entire Family Adheres To Sensible Money Management Principles
8. I Will Support the Creation and Growth of Minority-Owned Businesses
9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate Planning

10. I Will Strengthen My Community Through Philanthropy

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