Menu

How to remove a foreclosure from your credit report

Disclosure regarding our editorial content standards.

No one plans on going through a foreclosure, but when finances get tight, you might not be able to avoid it. A foreclosure is a legal process in which a lender seizes and sells a property after a borrower stops making payments under a repayment obligation contract.

The foreclosure process on its own is stressful and painful enough, and then you consider how foreclosing will continue to impact you long after it’s finished. A foreclosure can have a significant negative impact on your credit, making it more challenging for you to get back on your feet. A legitimate foreclosure will probably remain on your report for seven years, but there are some exceptions to that rule.

Keep reading to learn how to remove a foreclosure from your credit report.

When can you remove a foreclosure from your credit report?

There are a few instances when you can get a foreclosure removed from your credit report.

Most negative items can legally only stay on your credit report for seven years before they should be written off. That means that a foreclosure will impact your credit for the entire seven years. However, as time goes on, it will have less and less of an effect. The date of the first late payment that led to the default is considered the start of the seven years.

It should be removed automatically, and typically, the credit bureaus don’t need to be reminded of the seven-year time mark.

You can also request a review of the foreclosure listing on your credit report if the lender who owned your mortgage goes out of business. This won’t be automatic, so you’ll need first to find out that the lender is out of business and then file a request for review.

A foreclosure can also be removed from your credit report if you have a voluntary dismissal of the case. This is where your lender voluntarily dismisses the foreclosure lawsuit. Why would this occur? In some states, the homeowner can propose a voluntary foreclosure, also known as a deed in lieu of foreclosure.

Finally, a foreclosure can be removed from a credit report if it is lacking documentation. If the credit bureaus can’t find supporting documentation of your foreclosure, they may consider removing it from the report.

How to deal with an inaccurate foreclosure

If you have an inaccurate foreclosure on your credit report, you must act promptly.

1. Identify any errors on your reports

First, order a free copy of your credit report from all three major credit bureaus. Check each report to see if there are any errors in the foreclosure balance, the dates, the lender or the account number. If you find any inaccurate information, be sure to write it down.

2. Start a credit dispute

Next, start a credit dispute to address any errors you found. If there are errors on all three credit bureau reports, you’ll want to file a dispute with each bureau.

Write a dispute letter to the credit bureaus in question that includes information on why you’re challenging the data, provides proof and makes a clear request for the information to be updated or removed. The Federal Trade Commission has a sample letter you can use if you don’t know where to start.

After you start a dispute, the bureaus will have 30 days to verify the accuracy of the entry and respond by correcting it or removing it from your credit report.

3. Contact your lender

If the credit bureaus don’t remove the foreclosure from your credit report, your next approach should be to reach out to the lender. All lenders are obligated to investigate disputes. Write the same detailed letter you did to the credit bureaus and ask the lender to remove the entry from your credit report due to inaccuracies. Make sure to give them a 30-day deadline to do so.

If they can’t verify the information or don’t want to spend the time verifying, they might choose to simply remove the entry.

4. Work with a credit repair company

Removing foreclosures from your credit report requires filing a dispute with each of the three major credit bureaus. These credit bureaus have the right to dismiss any disputes they deem frivolous. The credit bureaus examine each dispute’s communication and proof before deeming it worthy of being considered. As a result, it’s essential you write disputes carefully, in a way that will resonate well with the bureaus.

To help with this, many people choose to work with a legitimate credit repair company. These organizations have dealt with the credit bureaus countless times and know how to navigate their processes to have the best chance of getting a dispute request reviewed.

Foreclosure and your credit

Foreclosure can cause your credit to drop by up to 160 points if you have excellent credit (the higher your score is, the more your credit will be affected by a foreclosure). This can result in higher interest rates and fewer options when it comes to borrowing money. Having a foreclosure on your credit report can also affect your ability to get another house in the immediate future.

However, you can recover from foreclosure so that you’re still able to purchase a home or get approved for loans. You’ll need to focus on rebuilding your credit. Start by paying your bills on time, checking your scores and reports regularly and being careful about new credit applications.

If you’re unsure where to start, consider using the services offered by CreditRepair.com.

Posted in Finance
Learn how it works

Questions about credit repair?

Chat with an expert: 1-800-255-0263

Facebook Twitter LinkedIn
Have a question?
Call us for a Free Credit Check
from a Credit Expert
1-855-255-0263
Top