For many previous homeowners who have lost their underwater homes the idea of ever owning a home again is the furthest thing from their minds. However, regaining control of your financial future should be a top priority. Here are the five “R’s” of rebuilding your credit after foreclosure.

1. Ramifications: No matter how you’ve lost your home, it’s essential to be aware of any financial ramifications. There could be tax backlash from the forgiven debt of a deed in lieu of foreclosure or a deficiency judgment from a short sale that you’re obligated to pay back. Reading the fine print and being fully aware of the debts associated with your previous loans will help you best address and repay them.

2. Review: Before you can get where you’re going, you have to know where you’ve been. After you’ve relinquished your home, access your free credit report to see exactly what flaws are in need of resolve, repair, or repay.

3. Recreate: At one time we are all born with impeccable or non-existent credit. One aspect of starting over means recreating the favorable conditions where your credit was well maintained. Recreating new, positive credit will help outweigh some of the negative credit you have accrued. Obtaining a minimum of three secured credit cards in which a consistent monthly balance is maintained and paid on time can do wonders to improve your credit score.

4. Responsibility: Take responsibility for your actions and don’t fall into bad spending patterns. Racking up huge credit card bills and paying your financial obligations late are only going to hinder the rebuilding process. Sign up for account notifications for your bills so that you are always reminded to make timely payments.

5. Remain patient: Losing a home can be a heart breaking process, and knowing the ordeal stays on your record for three to seven years can be discouraging. It’s important to take baby steps and remain patient. Rome wasn’t built in a day and your credit won’t be either. The more time that passes, the more debts you resolve, and the more positive credit you create, the sooner your report will recover!

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