One of the most common question that I received as a Bank attorney was “How will a foreclosure affect my credit?” The simple answer is that a foreclosure can be almost as detrimental as a bankruptcy which destroy you credit from anywhere from 7-10 years.
Generally, once you start to miss payments your credit will be damaged.
Effects of a Foreclosure on Your Credit Report
Your FICO score is the most commonly-used credit score by most lenders and credit bureaus (TransUnion, Equifax, and Experian) have shared how many points you lose when you’re dealing with a delinquent mortgage. Here are the average ranges of points you lose when you’re in foreclosure:
- 40 to 110 points when payments are 30 days late
- 70 to 135 points when payments are 90 days late
- 85 to 160 points when you’re dealing with a foreclosure
- 130 to 240 points when dealing with bankruptcy
If you want to protect your credit, you must continue to make as many payments as possible and work as soon as possible for a solution.
A loan modification commonly is reported to the credit bureaus as “partial payments being accepted,” which in terms of credit damage, is scarcely different from a 30-day late home but far better than a foreclosure. Short Sales and Deed in Lieu are advantageous alternatives if handled properly.
Our team at Foreclosure Jax can help by leading you through the alternatives in a manner designed to protect your credit score.
Let us help. Call 904.620.1001
