If you are concerned about your post foreclosure credit, you are not alone. Thousands of Americans are facing distress in the face of the financial downturn and foreclosures are happening at an alarming rate.
Foreclosure and Your Credit
A foreclosure will likely cause your credit score to drop drastically, about two or three hundred points. This can be worse if you are having other debt problems along with the foreclosure. Like bankruptcy, the foreclosure will stay on your credit for several years. Most foreclosures stay on credit reports for seven years.
Having a low credit score can result in the following:
- Credit card companies may be apprehensive to give you credit. If they do give you a card, the interest rate may be ridiculously high. Some cards carry a twenty-five percent interest rate. That is way too high. But, having a credit card in case of emergencies gives most people a feeling of security. A better way to get security is by saving money and putting it into diversified safe investments.
- You may find it difficult to get a loan for a vehicle. If your credit score is low, lenders will be concerned that lending you money is a risk investment. Lenders are in the business of making money through interest and repayment. If you do not repay them, then they lose money. As a result, if they are willing to take the risk and loan you money, they may charge you a higher interest rate as well. Buying a used vehicle can reduce the overall cost you end up paying. Saving money for a sizable down payment will also help keep monthly bills manageable.
Make sure to acquire your credit report after foreclosure and start doing whatever work is needed to clean up any credit marks that you can. This can make your credit improve more quickly.
And remember, you are not alone in facing this economic downturn and financial problems. Once you start to show that you have regained your financial footing, it will be easier to get loans and credit. In no time, you may be contemplating whether to purchase another home.
Getting Legal Help
If you are concerned about the possibility of your home being foreclosed on, contact an attorney today in your area. An experienced attorney can help you figure out your options and answer your questions about the process and how foreclosure will effect your future.
