How long does a foreclosure stay on my credit?

When you are having financial trouble, you may wonder about the difference between foreclosure and bankruptcy and what impact each will have on your credit. Having your home foreclosed on is one of the worst things that can happen to an individual’s credit and is very similar to a bankruptcy as far as what it will do to your credit score.  Legally, a home foreclosure can stay on your credit report for up to seven years, while a bankruptcy can stay on your report for as long as 10 years.  The foreclosure appears under the “Public Information” section of your report, which includes all court and legal judgments against you.  If you have other judgments, like court cases you have lost against others for financial reasons, those judgments appear in this section as well. 

The precise impact that a home foreclosure has on your particular credit score varies from person to person, but it is typically a significant hit.  Its for that reason that you should do you best to avoid foreclosure at all costs.  Some ways you can avoid the credit hit of foreclosure is by:

• Negotiating directly with your mortgage lender to work out an arrangement
• Seeking to modify or refinance the mortgage loan
• Putting your home up for sale, or short sale

If you have been affected by foreclosure, note that the credit implications will not last forever, and that there is much you can do to help improve your credit in the meanwhile.  Make every effort to pay all of your bills on time, and to lower your overall debt picture.  You may also wish to speak with a lawyer to learn about your options to avoid foreclosure so you can attempt to save your credit score.