How Long Does A Foreclosure Affect Your Credit?
Foreclosures are often financially devastating for those that fall victim to them. Far from the least of the problems that foreclosure will inevitably lead to is the negative impact on the victim’s credit score. This impact can mean poor credit for years to come and affect everything from a car loan to getting a cell phone plan. But not to worry, you can rebuild your life after a foreclosure. So how long will this deficit stay on your record, and what can you do to negate its effect?
A foreclosure will affect your credit score for seven years, from the date of the first unpaid payment. Fortunately, there are things that can be done to counteract the effects of foreclosure on your credit score.
What can you do to improve your credit score after a foreclosure?
For those who have fallen victim to foreclosure, the hit your credit score can feel like something you’ll never get out from underneath. Fortunately, there are plenty of things that you can do that will help get your credit score back up after a foreclosure brings it down.
The best way to improve your credit is to always be punctual when paying rent, car payments, etc. This will do a great deal to raise your credit score, as this is the most important factor in deciding your credit score. Punctuality in making payments will raise your credit score and get it back up to par long before the foreclosure has been purged from your credit history.
Another thing you can do to improve your credit score after a foreclosure is to minimize your expenditures and hold yourself to a more conservative budget. Cancelling unneeded subscriptions, cooking and eating at home instead of going out and other smart financial and other similarly smart financial moves will not only improve your credit but also prove invaluable in avoiding future crises.
However you tackle your credit woes, it’s important to remember that a foreclosure is not the end of your financial life. It may take months or years, but it is very feasible to recover from the low credit score that a foreclosure may result in. If you remain consistent in paying your debts and living frugally, two years from now you likely could be partially if not completely recovered.
Popular Real Estate Glossary Terms
Mortgage banker is the person or business that originates mortgages and receives payments. The mortgage banker typically sells these mortgages to investors and obtains service fees for the ...
Insurance coverage provided for an individual having a lease at a favorable rate, one which is less than the market value of the property. The insurance indemnifies the tenant for business ...
The definition of the price-to-rent ratio is very important for real estate investors. This ratio is a measurement for the affordability of a particular rental property and tells investors ...
Agequake is not the era of earthquakes! It’s a term that was coined by author Paul Wallace in his 1999 book “Agequake: Ridding the demographic rollercoaster shaking business, ...
Bank modifies the borrower's mortgage obligation, such as when the bank approves the homeowner's request for an extension of time to pay because of illness or loss of a job. One's ...
Personal income minus personal income tax payments and other government deductions. It is the personal income available for people to spend or save; also called take-home pay. It may be a ...
Combination of IRC 1034 and 121 dealing with the sale of a personal residence with the once-in-a-lifetime $125,000 exclusion that may be available for the "over-55" seller. Should the ...
Map presented to a municipality's planning agency by a real estate developer for consideration and approval. ...
A method of purchasing real estate whereby a maximum amount of leverage is used. Normally the seller will finance the down payment necessary to acquire a mortgage. Thus, the purchaser is ...
Have a question or comment?
We're here to help.