How will a foreclosure impact my credit?
When people are struggling to keep up with their house payments, it doesn’t take long for the mortgage company to start threatening foreclosure. One of the first questions people ask is what is going to happen to their credit rating. This is an important question, but there may be larger questions you should be asking, like, “How can I avoid foreclosure completely.?”
So, what about my credit score?
In most cases, your credit score will take an initial hit as soon as your foreclosure is reported. Your credit score could also suffer if some of the missed payments that led to the foreclosure are reported as well. The foreclosure itself will stay on your credit report for seven years. The impact of it will diminish over time as long as you don’t have additional credit issues during that time.
What’s all this talk about avoiding foreclosure?
Since the beginning of the recession, there have been more than 4 million home foreclosures across the nation. Many of these likely did not have to happen. Some homeowners may have been able to save their homes through loan reworks or personal bankruptcy. If you are facing foreclosure, do not think that your only option is to give your home.
What is perhaps the most surprising element of these situations is the number of people who are actually willing to just roll over and let the lenders take their homes without even inquiring about their rights. Speak to an lawyer who will fully explain your options and advise you about how you can save your home.
Most lawyers who handle foreclosure defense offer free initial consultations, so it typically won’t cost you anything to get your questions answered.