Corner Attorney

With foreclosure running rampant in the economy today, I thought I would share and article about how foreclosure affects your credit.

Foreclosure Credit Damage – How Does Foreclosure Affect Credit?

By Bobby Tucker

When a homeowner hasn’t made their monthly mortgage payments for 3 months or more, their lender will usually starts the foreclosure process. There can be many reasons why they haven’t been able to pay their mortgage payments such as: loss of job, spouse’s death, medical issues, etc; however the outcome is always the same, Foreclosure! What many homeowners do not realize is the foreclosure credit consequences they will face.

Your credit report is a very important factor in your financial life. You need credit to buy a home or car, rent an apartment, get a loan, and even to get a new job! In today’s housing crisis more and more homeowners cannot afford to pay their monthly mortgage payments and are going into foreclosure. A foreclosure can ruin your credit score lowering it as much as 300 points!

3 Ways A Foreclosure Can Impact Your Credit Score:

1. Your credit score will instantly decrease 200-300 points once a foreclosure appears on your credit report. Even someone with a good credit rating such as a 700 will be drastically affected by a foreclosure after their score lowers to around 400…

2. A foreclosure can stay on your credit report for up to seven years and the effects of foreclosure credit consequences can last many years after. It’s important for homeowners to understand how difficult it is to recover your credit score after a foreclosure.

3. Lenders cannot offer you financing for 24 months following a foreclosure. This means you cannot get a personal loan, car, new home, credit cards, and even utilities such as cable are dependent on your credit rating. In addition it will be next to impossible to be approved for another mortgage loan for at least 3-5 years depending on the situation.

Foreclosure should almost always be a homeowner’s last option to avoid the foreclosure credit damage that so many homeowners have learned to late. There are many foreclosure alternatives available to homeowners such as: Deed in lieu of foreclosure, a short sale or “short pay-off”, and a loan modification. If you are in or facing foreclosure, now is the time to act and do something to save your home and credit score…

Get your Free Do It Yourself Loan Modification Kit. This DIY Loan Mod Kit includes everything you need to complete a loan modification on your own. It will teach you how to negotiate with your lender and most importantly what NOT to say to your lender. The secret to a successful loan modification is how you present your case to the lender. This DIY loan mod kit will explain the loan modification negotiation process in explicit detail.

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Tags: Foreclosure, Mortgage modification