How to Correct a Foreclosure on Your Credit

A foreclosure has a significant negative impact on a credit score. In some cases, errors can make the situation look even worse. There could be an error in the amount that was reported owed, the date of foreclosure, or how the mortgage was reported to the credit bureau. A mistake on the credit report can show the home was foreclosed when a deed in lieu of foreclosure was completed instead. Even mortgage issues are bound to lower your credit score -- so it's important to take the time to correct false information.

Instructions

1

Obtain your credit report. Under the Fair Credit and Reporting Act, consumers are entitled to a free credit report from all three bureaus. Visit AnnualCreditReport.com to request your copy.

2

Examine all three reports to check for discrepancies. Foreclosures are under the "Public Records" or "Public Information" section of your credit report. View the amount owed and the date of foreclosure. Compare the information on each report pertaining to the foreclosure.

3

Contact the lender to address any concerns and clarify information. If you're unsure about the information reported, call your lender to discuss the foreclosure. Address the issue, and request a correction, if you notice an error.

4

Gather copies of your documentation. Provide proof of the foreclosure error, such as your original mortgage paperwork, letters from your lender, borrower's note, or the lender's waiver of a deficiency judgment.

5

Initiate a dispute with each credit bureau reporting the error. You can file a dispute online, or over the phone, but the FTC recommends mailing a dispute letter to the bureau along with your documentation. The credit bureau will investigate your claim by contacting the lender. Your lender will need to provide their evidence that proves the foreclosure information reported was correct. If the lender doesn't respond within 30 days, or fails to correct the error, it must be removed.