How Does A Foreclosure Affect My Credit Rating?

Whenever people talk about foreclosure, their immediate thoughts are bad credit, as well they should be.

Although lenders have in the recent past been increasingly friendly to borrowers that have a foreclosure or bankruptcy on their record, the collapse of the mortgage market will make it more difficult to get another mortgage. Lenders are notoriously risk-adverse and will be operating on a once bitten, twice shy
principle in the future.

There are many factors that determine how your credit is affected however it is fair to say that you should expect your FICO score to drop by 200 to 280 points when you foreclose.

If your credit score was 675 before the foreclosure and it plummets to 395, you will not be eligible for future credit card applications or car financing for up to three years.

Being late on payments is a big black mark on your credit. It is theoretically possible to rebuild but this is difficult in practice if you are not able to qualify for additional credit. Any small loans you may qualify for will attract outrageous rates of interest, making it difficult to get ahead.

If you are afraid that you are going to have to foreclose on your home, the key thing to do is get advice from a mortgage professional immediately. In most cases, there is a way around the foreclosure but the chances of success are less the longer you wait.

To find out where you stand, get in touch with The National Mortgage Expert for a FREE Financial Analysis. This isn’t just a five minute conversation about interest rates. I’m committed to helping people get back on track financially as well as keeping their homes.

My financial analysis appointments are an hour long, so I can get a full idea of what your situation is and how we can find a solution.

I only have space for 7 appointments each month, so either write in to reserve your space or call me at 800 653 2864.

Remember, always stay positive! Help is available.