Suffering the loss of your home to foreclosure is devastating, but there are strategies you can implement to improve your credit.

Your ultimate goals are to quickly get your spending under control, and acquire a new home as soon as possible, which in turn, will improve your credit score. In practically every difficult situation you find yourself in, the first step you take toward any goal is the hardest, and recovering from a foreclosure is no exception. So, where do you start?

Begin by limiting your credit card use and increasing your monthly income. Identify specific ways you can decrease your monthly expenses, and pay for everything in cash.

Swallow your pride, get a second job, and find some alternative ways to increase your monthly take home pay. Use your talents and look for some alternative ways to increase your income for the short term. A second job is a temporary ‘fix' until you are back on target financially.

Your goal is to pay every bill you have on time, and to make more than the minimum payments. If you don't have enough money to pay all of your bills, pay the household expenses first, then your car, and then, minimum payments on credit cards. Regular, on time payments will improve your credit score.

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Next, start contributing to a savings account. You will need these funds to make a small down payment on a new ‘inexpensive' house. You do not want to have to pay PMI insurance. When you have approximately $1500 in the bank, begin to look for a very inexpensive home. Purchasing a new inexpensive home is an important step. You want to stop giving money to a landlord and begin personal investing. If you have money in the bank, your credit score will improve.

Follow these rules for choosing a new home. Ideally, you must have enough in savings to pay the down payment (20%) without having to buy the additional PMI insurance. Your monthly income needs to be at least 3 or 4 times greater than the monthly payments. Do not move until you have saved enough money to pay all of your initial deposits for utilities and moving expenses. This strategy will prevent you from re-damaging your credit score by taking on deposits and utilities you cannot pay on time.

Recognize that the new ‘inexpensive' house is temporary. You are getting back on your financial feet and improve your credit. Your goal is to move out of this ‘inexpensive home within 3 to 5 years. Begin to focus on building an emergency fund and saving the $5000 or more that you will need for a down payment on a more valuable home.

By the time you are ready to move to a more expensive home, you will have several years of paying your bills on time since the foreclosure and you will see an increase in your credit score.