Consequences of A Devastating Foreclosure...
Try at all costs to avoid the life-altering and devastating consequences of a foreclosure...
How would a foreclosure affect your credit?
A foreclosure's impact on your credit will depend on your credit standing before the negative mark hits. The higher your score, the greater the impact will likely be.
In general, though, you can expect a foreclosure to drop your score by 100 to 200 or more points, according to the scoring agencies.
It can take up to 7 to 10 years for your FICO score to recover entirely. This is the reason why it is a life-altering event, as the foreclosure along with late payment history and low credit scores could have a widespread financial impact beyond triggering late fees, penalties, and higher rates. It could also affect one's ability to qualify for future mortgage loans, rental properties, low-interest rates on various types of financing, employment, insurance, etc.
What if a foreclosure doesn’t fall off after seven years?
The credit reporting process is imperfect. That can occasionally result in a foreclosure or other derogatory marks not falling off automatically after seven years. In that case, you can dispute the credit report error(s).
You may be able to rebuild your credit score sooner
Don't let the seven-year timeline stop you from acting — you can begin working to rehabilitate your credit score right away with discipline. Help offset the negative mark by stacking up positive data on your credit reports:
- There are many resources and strategies to boost your credit score rather quickly and effectively! - Pay all bills on time. Payment history is the biggest factor affecting credit scores. You want to build up a long track record of on-time payments, so you look good to potential lenders in the future.
- Use no more than 10-30% of your credit limits at all times, if possible. The second-biggest factor in attaining a high score is how much of your credit limits you use, which is called credit utilization. The lower your credit utilization, the better it is for your FICO score.
You can also use the ONLY Federally secured website at FREE ANNUAL CREDIT REPORT to obtain a FREE copy of each of the THREE BUREAUS or credit monitoring reporting companies' reports to monitor the accuracy of your credit profile behavior. This website is loaded with a wealth of information and resources to ensure that the information on all of your credit reports is correct and up to date. For more information, including information about additional rights, go to www.consumerfinance.gov/learnmore or write to: Consumer Financial Protection Bureau, 1700 G Street N.W., Washington, DC 20552.
- There are many resources and strategies to boost your credit score rather quickly and effectively! - Pay all bills on time. Payment history is the biggest factor affecting credit scores. You want to build up a long track record of on-time payments, so you look good to potential lenders in the future.
- Use no more than 10-30% of your credit limits at all times, if possible. The second-biggest factor in attaining a high score is how much of your credit limits you use, which is called credit utilization. The lower your credit utilization, the better it is for your FICO score.
You can also use the ONLY Federally secured website at FREE ANNUAL CREDIT REPORT to obtain a FREE copy of each of the THREE BUREAUS or credit monitoring reporting companies' reports to monitor the accuracy of your credit profile behavior. This website is loaded with a wealth of information and resources to ensure that the information on all of your credit reports is correct and up to date. For more information, including information about additional rights, go to www.consumerfinance.gov/learnmore or write to: Consumer Financial Protection Bureau, 1700 G Street N.W., Washington, DC 20552.