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How Will a Foreclosure Affect My Credit Score?

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Copyright Lynnette Khalfani-Cox

If you’re facing foreclosure, you may be wondering how this will affect your credit score. Missing payments on your mortgage and other bills may have already dropped your credit score by several points, and when you reach foreclosure status, you will notice a significant drop in your credit rating. If you’ve been struggling financially for a while, the foreclosure could have an even more significant impact on your credit standing now, and in the future. Effects of a Foreclosure on Your Credit Report Your FICO score is the most commonly-used credit score by most lenders, and credit bureaus have shared how many points you lose when you’re dealing with a delinquent mortgage. Here are the average ranges of points you lose when you’re in foreclosure: 40 to 110 points when payments are 30 days late 70 to 135 points when payments are 90 days late 85 to 160 points when you’re dealing with a foreclosure, short sale or deed-in-lieu Even if you had been making your mortgage payments on time for several months and years before dealing with financial distress, the banks will report missed payments to the credit bureaus right away. For many people facing foreclosure, the mortgage isn’t […]

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