How long does a foreclosure stay on your credit report?
Foreclosure happens when you don’t pay off your mortgage and your lender owns the home.
A foreclosure stays on your credit reports for seven years from the date of the first missed payment, which lowers your credit rating. After this period of time, the foreclosure mark should automatically drop from your reports. But you can start working to restore your credit score immediately.
Know how your credit is rated
See your free score and the factors that influence it, as well as information on how to keep building.
How a foreclosure affects your credit
The impact of a foreclosure on your credit will depend on your creditworthiness before the negative rating hits. The higher your score, the greater the likely impact.
In general, however, you can expect a lockdown to reduce your score by 100 points or more, according to a 2011 FICO report, a credit rating agency. It can take up to seven to 10 years for your score to fully recover, FICO also found.
What if a foreclosure doesn’t fall after seven years?
The credit assessment process is flawed. This can sometimes result in foreclosure or other pejorative mark do not fall automatically after seven years.
You can rebuild much sooner
Don’t let the seven-year deadline stop you from taking action – you can start working to rehabilitate your credit score immediately. Help offset the negative rating by accumulating positive data on your credit reports:
Pay all bills on time. Payment history is the the biggest factor affecting credit scores. You want to build up a long history of on-time payments in order to look good to potential lenders in the future.
Use 30% or less of your credit limits. The second most important factor in scores is how much of your credit limits you are using, which is called credit usage. the reduce your credit usage, the better for your score.
If necessary, find ways to rebuild credit like getting a secured credit card or a lending institution loan.