Losing your home may also mean losing your good credit status. After losing a home to foreclosure, the previous owner is left with a multitude of problems: No where to live, a lack of credit, possible taxation on what was previously owned, and to compound the unfairness, no job. Although the most recent economic downturn has made foreclosure far out of the ordinary, and not the home owners fault – necessarily – the government has exempted most from taxes, that does not say that is what ordinarily happens.
Still, this is no time to place blame and it is no time to glean a little comfort by moaning, groaning and feeling sorry for yourself. Whatever introspection is done should be an honest look back at what went wrong and a determination to set it right, even if it takes you the rest of your life, and in most likelihood, it will.
To explain the above statement to elevate it from any sadistic thinking, the rest of your life will be lived more carefully and with a workable budget and with no quick fixes. Time is needed to fix bad credit and it is an ongoing venture; it is not something one can do and then forget about it. Therefore, the credit consequences of a foreclosure unfold in numerous ways for several years:
Where do you live? It may be hard to convince a landlord to rent to you if you have been so careless as to have lost your home. If you can assure them of your good intentions by offering to pay a double deposit form the money collected from the sale of furniture and equipment, they may offer you a year lease on an apartment.
This means of course your life style must be changed dramatically. No longer need you brag about being in debt up to your eyeballs while continuing your extravagant life style. You can lead the life of frugal peasant that has once again learned a hard lesson: Nothing in life if free, and if a free lunch is offered, check out the kitchen to see if rats are not roaming around.
Where to find work
If your job loss was due to the company failure and you have a good work record and your skills are up to date, your difficulty in finding the work may be nothing lacking in you but in the overall economy. You are not alone, many others are in the same predicament.
As you line up for unemployment money, don’t waste or bypass any present jobs that will bring in some money. Sign up as a temporary. This will show you more possibilities along your line of work and, in the meantime will be better than nothing. When you are rehired and you can resume work again, it will be easier to quit a temporary position, than a regular one.
Learn about credit. Before foreclosure, credit scores and ratings were something that didn’t bother you much. As long as you were allowed credit, it didn’t bother you that you were borrowing above your ability to pay should something unforeseen happen. Now that the unforeseen has happened, a credit score drop of 250 points is meaningful.
It means that you are now in the position to be turned down for any amount of money needed. It will take at least seven years before the slate will be wiped clean and your credit will again be where it was before all this happened. The first two or three years will be the hardest, but with your determination to succeed with your budget, your newly accepted life style, and your new way of learning the real value of money is in its bargaining ability, and not necessarily in its accumulation for show-off purposes, you will live a more comfortable life.
You get started on your new life style by paying your bills on time, by sticking to your budget, by not swearing off credit cards, but using one to re-establish a good credit rating, and by buying only what you need.