How Does Foreclosure Affect My Credit Score?

In this short video I’ll be talking about how much your credit score gets impacted for being late on your mtg payments. I’ll also go over a few options that are available to you to avoid foreclosure. Hope it helps!

How Does Foreclosure Affect My Credit Score??
Video Transcription

Warner: Hey guys, so we’ve received a question from a few people and there were wondering how bad their credit score would get impacted if they were to go through foreclosure. So what I did is I wrote down on this dry erase board, I’m going to turn the camera in a couple of seconds and I wrote down exactly how much your credit score would be impacted depending on your unique circumstance.

So how does foreclosure affect my credit score? If you’re more than 30 days late on your mortgage payments, you’re going to be looking at a 40 to a 110 point decrease in your credit score on average. If your credit score is about 700 or more, then it’s most likely going to be towards the 100 to 110 mark. If your credit score is about 500 or 600, then the drop in points would be much less, it would probably be around 40 to like 60 or 70.

If you’re 90 days late on your mortgage payments, then now you’re looking at a 70 to 135 plunge in your credit score. Once again, the higher the credit score, the bigger the impact. After that, we start heading into the short sale or foreclosure territory, you could say. Now for foreclosure, it’s worse because not only does it decrease by 85 to 160 points on average, but now your credit score is affected for about seven years. You can’t get a loan for about seven years and in a lot of cases, you also can’t rent.

For a short sale, it’s around that too. It’s a little bit better, but it’s still not recommended. After that, we’re headed towards bankruptcy. That’s a worst-case scenario of course and I believe that most people would want to avoid that, but that would affect your credit score by 130 to 240.

Now, aside from these options here, these are typically available to people that aren’t making any payments on their mortgage or are behind and can’t catch up for some reason. You could also call your bank and try to refinance your loan or try to agree to some terms to be able to catch up, and not have to go into either short sale or foreclosure.

You could also list it on the market with an agent. Now a lot of times it just doesn’t work because you need to sell in a certain time period or maybe your house just needs too much work that it won’t be worth putting on the market. Aside from that, you can also sell it to a cash investor like us. We do buy houses, cash. We buy them as-is.

We buy them in less than 30 days sometimes and we can close on your terms. So these are just a couple of options, a couple of possible solutions that are available to you. If you guys have any more questions or concerns, please feel free to reach out and we’d be more than happy to help. Thanks. Bye.

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