AmericanForeclosures.com

July 31, 2009

How Long Does it Take to Get a Good Credit Score After Foreclosing on a Home?

credit scoreMany people especially these days with the down market are wondering in the back of their minds just how bad does foreclosing affect your credit score? I’m sure that everyone has heard different percentages about how bad and how long your credit score is affected by foreclosing on a home. To put these rumors to rest, I thought I’d tackle this topic. To start a creditor can’t lend to you for 2 years after a foreclosure.  This means a loan on anything including, home loan, car loan, student loan, buying a computer and more. Also, people who check your score like, land lords, cell phone providers, and credit card lenders won’t approve you. Your score can drop as much as 300 points.
Going into foreclosure does not permanently destroy your credit score and loan receiving abilities. After 24 months your credit score will begin to recover assuming that you pay your debt off on time. It will still take 7 years for a foreclosure to be completely offer your credit record. However, after 5 you may be able to get a home loan, but at a high interest rate. You can always refinance after 7 years (total from your foreclosure) and get a lower interest rate once your foreclosure is off of your credit record and you can prove that you have a stable income.
Foreclosing isn’t the end of the world but will certainly put your credit out of commission for a few years. If you do find yourself in trouble, it’s best to consult a finance expert and weigh your options.

Many people especially these days with the down market are wondering in the back of their minds just how bad does foreclosing affect your credit score? I’m sure that everyone has heard different percentages about how bad and how long your credit score is affected by foreclosing on a home. To put these rumors to rest, I thought I’d tackle this topic. To start a creditor can’t lend to you for 2 years after a foreclosure. This means a loan on anything including, home loan, car loan, student loan, buying a computer and more. Also, people who check your score like, land lords, cell phone providers, and credit card lenders won’t approve you. Your score can drop as much as 300 points.

Going into foreclosure does not permanently destroy your credit score and loan receiving abilities. After 24 months your credit score will begin to recover assuming that you pay your debt off on time. It will still take 7 years for a foreclosure to be completely offer your credit record. However, after 5 you may be able to get a home loan, but at a high interest rate. You can always refinance after 7 years (total from your foreclosure) and get a lower interest rate once your foreclosure is off of your credit record and you can prove that you have a stable income.

Foreclosing isn’t the end of the world but will certainly put your credit out of commission for a few years. If you do find yourself in trouble, it’s best to consult a finance expert and weigh your options.

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