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In order for the short sale talks to begin, I had to stop making payments. As such, while the bulk of my three credit reports are fairly clean, they currently show the home loan (and 2nd) to be past due. Therefore when I just applied for an AMEX card, I was turned down, even though I've had an AMEX card for 13 years with my previous employer.
I'm guessing I can't do much until the short sale is finished. From what I understand that the reports should show the loans as being "settled debt" though not paid in full. I was curious to know if others on here have gone through a similar situation and how long it takes to start improving one's scores?
Also, are there any good tips/techniques for building a score, such as taking out small loans then paying them off?
Its goign to take time as even lower scores are having a hardtime getting loans. The governamnt rules are working tweo ways. One is discouraging risker loans based on record and income to debt.Everyone will face it to a degree.
I've heard from numerous financial experts that short sales only come up on your credit report for 3.5 years while a foreclosure stays on for 7. You might want to check, but that's what I've been hearing. A short sale looks much better on your credit report than a foreclosure.
Your biggest issue with obtaining credit TODAY is that you currently have 30 Days/60 Days/90 Days past dues on your credit report. It is highly unlikely that anyone will extend credit to you today.
After your short sale is completed, you may have the "settled debt" label associated with your mortgages, but at least they will show as paid and be "current"
As long as you have no active delinquencies, it's just a waiting game from there.... I'd wait about 6 months to a year after the sale before applying for new credit... or look to social lending sites like prosper.com where people are willing to take a chance on you.
By the way... Have you obtained your credit report from annualcreditreport.com? I'd be interested to find out if your previous employer's Amex actually shows up on your personal report..... typically it doesn't.
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