How to Quickly Rebuld Credit Score After Short Sale

While a short sale can be devastating to your credit, it is not as damaging as foreclosure and/or bankruptcy. Recovering from the impact of a short sale isn't easy but it is possible to reestablish a positive credit history and boost your credit score in a fairly short amount of time. There are several steps you can take to quickly rebuild your credit after a short sale.

Instructions

1

Obtain a secured credit card or secured loan. A secured credit card or loan is one that is backed by collateral that you provide. Do not confuse prepaid debit cards with secured credit cards. A secured credit card is issued by a bank and is reported to the credit bureaus, whereas a prepaid debit card is not.

2

Use your new credit wisely. With a secured credit card, your limit should be low, no more than a few hundred dollars at most. Use your card regularly but only charge as much as you can afford to pay in full each month. Keep your applications for new credit to a minimum and do not incur large amounts of new debt.

3

Establish a positive rental history. If you've gone through a short sale, generally, you will not be able to qualify for most mortgage loans for at least two years. During this time, you will want to establish a good rental history to help build up your credit. Ask if your landlord reports regularly to the credit bureaus, as this will help you in establishing your rental history.

4

Pay all your bills on time. Even one late or missed payment can cause your credit score to drop as much as 100 points, so paying bills on time is crucial. If you have not yet learned how to budget, now is the time to do so. Learning how to budget will not only help you to pay your bills on time but it will also help you to better manage your finances overall.

5

Monitor your credit report regularly and dispute negative information. Verify that your accounts are being reported properly and look carefully for errors or incorrect information. If you find something you feel to be inaccurate, take steps to dispute it with the proper credit reporting bureau.