How long does a foreclosure stay on your credit

If you are facing foreclosure, you're sure to wonder what will happen to your credit score. Your bank, credit card company, employer, school and even your cell phone company may check your credit score. How long will a foreclosure affect your credit? The typical answer is 7 years although in theory it could be on your credit report forever. Federal law (Fair Credit Reporting Act) requires that any negative remarks be removed upon request after 7 years, so as long as you request to have the foreclosure removed from your credit report, it should be clear after 7 years.

As soon as you miss your first mortgage payment, your lender will send that information to the credit bureaus. After you home is finished with the foreclosure process, the credit bureaus will receive an update from your lender and modify your credit history to show a foreclosure. Your credit report will show details of your failure to pay your mortgage to the lender. It will read that you were late in making your mortgage payments, and it will also highlight every time you were negligent in paying your mortgage for whatever months you did not pay.

Having your home foreclosed on will do serious damage to your credit score. As far as your credit history goes, it's one of the worst things that can happen, right next to bankruptcy. So if at all possible, you should try to avoid foreclosure altogether.

The good news is a foreclosure won't destroy your credit forever. It can only stay on your credit report for up to seven years. During that seven-year period, it's possible to improve your score after the foreclosure. As the foreclosure gets older on your credit history it will have less of an impact and as long as your more recent credit history is positive, there is no reason that your score will not improve dramatically.

It's impossible to determine how many points your score will drop, but it will definitely drop. Your credit score is determined by many factors and everyone's individual score may drop more or less based on those other determining factors. It is in your best interest to avoid a foreclosure to save your credit score, if at all possible. If you can't avoid foreclosure, then start working on a plan to rebuild your credit after the foreclosure happens.