What impact will foreclosure have on your credit score?
For many people who are threatened with foreclosure, the worst aspect of the situation is the fact that they may lose their home where they have built a life with their family and where they had believed they would spend their future. As if this weren’t bad enough, a foreclosure also has the potential to wreck the homeowner’s credit. Not only could you be forced to move and leave behind the home you cherished, you could also end up with a dramatically reduced credit score that could make life difficult for years to come.
There is no way to predict with accuracy how much a foreclosure will impact any individual’s credit score, but the normal reduction is in the range of 100 points. One of the most perverse facts about the relationship between foreclosure and credit is that individuals with higher credit scores can actually expect to see a greater reduction than those with lower scores. The result is that you will be paying higher interest rates if you have to apply for a credit card, line of credit or auto loan, as well as the fact that a potential landlord may deny your rental application based on too low of a credit score. You will also be unable to get approved for a new mortgage for several years.
How long does foreclosure stay on your credit history report?
The good news is that, although foreclosure will negatively influence your credit score, it is not a permanent effect. The foreclosure will disappear from your credit report after seven years, and in the time between now and then, the effect will gradually lessen. You can accelerate the process of repairing your credit by living within your means and staying current on all your other debts. At The Law Offices of Justin McMurray, P.A., we understand how much is at stake for your future, and we urge you to contact us now for a free consultation. A Jacksonville foreclosure defense lawyer from our team can meet with you to review your circumstances and explain more about the ramifications of foreclosure, and we are ready to fight to help you avoid a negative outcome to the situation.