It is a common fact that after a foreclosure on your property or filing a bankruptcy to erase your debt from history might give you a negative rating on your credit, it is also good since you will be on the basis of starting over. Given that you can start again from zero, you will be able to clean up your act and work your way up again in good health.

Before you can start restoring your credit, you need to make sure that you have the mindset for it. You need to remind yourself constantly on why you are doing this in the first place; try to remind yourself of the various errors that you made in the past that led to the downfall of your credit rating.

Don't keep your bills unattended

When restoring your credit rating, its always important to take note of all the transactions that you incurred before and after your foreclosure and bankruptcy incident. Take note of all the transactions which gives you a minus credit rating and try to find ways on getting rid of them. If it is an outstanding payment, then you have to make sure that you pay it slow so that it won't burden you financially.

Get your credit record and start cleaning?

Seeing all those negative remarks on our credit reports is simply too much for us to handle. After a foreclosure or a bankruptcy, you should avoid the small problems that add up to a negative credit rating. Here are some tips to give the green back to your credit:

1. Since you are starting again from scratch, try to keep payments on time avoid messing up your credit some more. Double check all your bills, especially the dates, and make sure that you pay them on time.

2. Try to keep questionable items off your credit report. Keep a close eye on transaction dates, companies, amounts, as well as contact information to determine if you made the transaction or not. If not, then don't ignore it and contact the concerned authorities immediately and have it removed.

3. Steer away from payments with high interest rates. Most of us buy what we want without taking into consideration the interest that is included with the purchases. Even if these purchases might look small at first, it might skyrocket to debt if left unchecked.

Check anyone?

By being part of a foreclosure or bankruptcy, you are showing information to concerned individuals that you were suffering from financial instability. If you are paying in cash or credit for most of your transactions, they you'd better consider paying with check in the near future. Having to pay with a check shows that you have a good financial status with banks and underwriters will be checking these out especially when you apply for a loan.

Horde receipts

Not all payments will be reflected on your credit report immediately; some will take time to update and may show up after a year or two. An example of these non-traditional trade references are cell phone bills, store credit accounts, car insurance payments and other receipts. Try to keep all these transaction records safe since these documents can help you out when you want to show the bank that you are a good credit risk.

Try to gather at least a years worth of these transaction records and try to file them. When you try to apply for a mortgage loan at a bank or any lending institution then these will come in handy. Just make sure that you paid on time as reflected in the transaction receipt.

A new view on credit cards

If you are trying to fix your credit rating for the better then it is a good idea to apply for a secured credit card. These kinds of credit cards allow you to deposit into an account which you can borrow through transactions made with it. By using this kind of method, you are establishing a positive payment history with the bank and in time they might grant you an increased credit line which is greater than your initial deposit.

Some might think it's impossible to acquire another loan after a bout of foreclosure or bankruptcy in their life. On the contrary, some lending companies do provide mortgage loans to those who have a history with financial difficulties. Even with damaged credit, it is still possible to get a loan and your dream home, and here's how.

It is recommended to forgo getting a loan within a span of 2 to 3 years. These times will be well spent in repairing your damaged credit rating, and will allow you ample time to start over again from scratch.

Fix the problem

Your main problem in applying for a loan after foreclosure and bankruptcy is your damaged credit rating. The first order of business before setting out for a new loan is to restore your damaged credit. Here are some steps on how to restore your negative credit rating:

1. Try to get a credit report and check out each item carefully. Take note of those transactions which gives you a negative credit rating. If the negative credit stems from payment problems, then you better concentrate by doing on time payment. This might take some time depending on the number of transactions you made with late payments, but everything will all add up in the long run.

2. It is quite possible to obtain a loan even after foreclosure and bankruptcy issues; it is true that its impossible to get low interests rates from lending companies on the first hand; but as you continue to do on-time payments then you are well on your way to repairing your damaged credit. If the company notices that you've been making on-time payment on a regular basis then they might award you by lowering your interest rates.

3. Getting a new and secured credit card is a good way to improve your credit rating. Try to make on time payments with your new credit card for a year to show the lending organization that you are financially stable and your past woes are now erased from history.

Finding a lender for your new home

It will be quite difficult in finding a new mortgage lender that will provide you with the best deals for your dream home, but never impossible. It is true that your past bout with foreclosure and bankruptcy damaged your credit thus earning you higher interest rates than normal from lenders around the city.

There are two ways to go for a loan even with a damaged credit: one, you can scout around for lenders with manageable interest rates and continually pay on-time so that they can lower the interest rates with your timely payments. Second, you can scout around for various lenders who are willing to give people with bad credit another chance at life.

Surfing the internet is a great way in finding a lender that will suit your needs. Online mortgage brokers will go out of their way to help you out even if you have a damaged credit record. Also, some online lending companies give low interest rates even to ones with bad credit record; try to keep an eye out for these sites since you can get back to them later to compare terms and agreements, conditions and interest rates.

If traditional lenders fail

More often than not, traditional lenders will refuse to do business with people with bad credit records, especially those who just came out from foreclosure and bankruptcy; then the only option you have is through sub prime mortgage loan lenders.

Even with bad credit, sub prime and high-risk mortgage lenders do business with people who have credit ratings of 650 and below. The standard score for any traditional lender is 660 and above. Often time, traditional lenders will even raise the requirement to 670 just to be sure that the risk is less when giving out the loan.

Sub prime and high-risk mortgage lenders are usually found online with sites detailed with various information like requirements, qualification criteria and other services. You would do well to search online for various companies that offers these services to people with damaged credit records.