How much does your credit score drop with a foreclosure?

by oliver on September 30, 2010

Question:

How much does your credit score drop with a foreclosure?

Answer:

Most of the time, foreclosure largely affects the credit score or rating. However, the number of deducted points will depend on how high your credit score is. The higher your credit score prior to the foreclosure, the more points will be deducted from it. Usually, a foreclosure can lower your current credit rating up to 300 points. Since foreclosure has a very large effect on your credit rating, you should, as much as possible avoid it or stop it from happening.

A foreclosure appears in your tax statement for a period of ten years at least so it will largely affect your life. To prevent foreclosure, make sure that you make all your payments every month. If you are behind with your payments and cannot keep up, talk to your lender and work out an agreement. Your lender would probably help you keep your home because foreclosure will also affect him negatively. You may ask for a mortgage modification in order for you to keep your home.

In this process, your lender agrees to change your mortgage terms and conditions in order to make it more affordable to you. You may contact a real estate attorney to know about how you can avoid or stop foreclosure in your state. Remember that a foreclosure process gives a grave and negative effect on your credit score so act quickly.

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