The Effects of Foreclosure

On Your Credit Score

Effects of Foreclosure on Your Credit Score

The effects of a foreclosure can be adverse on your credit score, and if you are on the verge of foreclosure you may have already be experiencing the effects. 

According to the Fair Isaac Corporation (2010), your credit score credit score is likely to drop 40 to 110 points with a late payment of just 30 days.  After 90 days late your credit score is effected by 70 to 135 points.  Now the effects of foreclosure on your credit score will cost you 85 to 160 points.

With the average credit score running in the range of 700, the effects of foreclosure can reduce a person's credit score to that beyond which he/she can buy another home.  Now add the effects of late payments along with a foreclosure and you are looking at major damage to your credit score.  Even if a homeowner has paid religiously on their mortgage loan for 10 years, the first late payment and/or foreclosure will show the respective effects to their credit score. 

There are variations to the credit score changes because each borrower has a different mix of credit history and usage. 

A foreclosure will take 7 to 10 years before dropping off your credit, depending on which state you live in.  Although you may be able to be approved for another home loan before then, the effects of the foreclosure on your credit score will ensure that you end up paying a higher interest rate. 

In the end, foreclosure is one of the last options for any homeowner and one of the worst, short of bankruptcy.  Before you experience the negative effects, do all you can to protect yourself from foreclosure and a damaged credit score.  There are options our there to prevent against the negative effects of foreclosure on your personal credit score.

Call 888-766-3693 to avoid foreclosure or read reviews of companies who may be able to stop foreclosure.

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