How Long Does a Foreclosure Stay on My Credit Report?

By Bill Herrfeldt

  • Overview

    Information about your foreclosure will remain on your credit report for up to seven years. You will find it in the "Public Information" section of your report, along with other legal judgments that may have been made against you. This is particularly damaging information because, regardless of why it occurred, it tells future lenders that your ability to manage resources is suspect.
  • Significance

    Your ability to secure credit in the future may be seriously impaired by a foreclosure that appears on your credit report. This is especially true if you plan to apply for a mortgage loan, because most mortgage lenders are unwilling to make a loan to someone that has allowed that to occur.
  • Time Frame

    Most mortgage lenders begin the collection process once a borrower is about to miss his second payment in a row. Realizing that your credit report will be so negatively impacted by a foreclosure, you should do everything necessary to prevent it from occurring including working with your lender to find ways to bring your account up to date. Lenders want to avoid the high cost of foreclosure so they will assist you from "forbearance" of payments on the loan if you are out of work to reducing the interest rate to make payments easier for you.


  • Considerations

    Many people must decide between bankruptcy and foreclosure to solve their problems. While foreclosure will remain on your credit report for up to seven years, bankruptcy will remain there for about 10 years. Both will lower your overall score dramatically, making it more difficult to get credit in the future. If these are your only alternatives, discuss both with your legal adviser before making a decision.
  • Effects

    Please remember that your credit score is the composite of your total credit history over about the last seven years. Therefore, a foreclosure may have a huge impact on your score if you have few debts. Interestingly, it will have less impact if you have handled several other debts as agreed. For example, if you have student loans, a car loan and various credit cards, all of which you have handled well, then a foreclosure will have only a minor affect on your overall score.
  • Prevention/Solution

    If you have no alternative but to have a foreclosure on your credit report, then the chances are good that it will have a serious negative impact on your score. If you would like to borrow money in the future at a reasonable rate of interest, it behooves you now to begin making improvements to your credit report. First, review it carefully for errors that further affect your score and ask that they be erased. Since your report will contain the majority of your credit transactions, see where you can begin making improvements in the way you handle credit. And finally, reduce the number of credit cards in you wallet to a manageable number and make sure they are current.
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