How Does a Foreclosure Affect Your FICO Score?

Your credit score is a valuable asset if you take care of it – but a serious liability if you don’t.

Mortgage expert Dan Green recently posted a fantastic summary on his blog regarding negative credit activity and how it impacts your FICO score.

If you execute a foreclosure, Dan says, you can expect a significant drop – 85 to 160 points or more – unless you do something about it.

The actual amount of the drop will vary based on your existing score, which is meant to reflect the risk of giving borrowers credit. Lower scores will drop less because their scores already reflect their less-than-perfect creditworthiness, while higher scores will drop more.

Homeowners on the precipice of foreclosure may feel like they’re out of options. However, this is very often not the case. If you are facing foreclosure, please get in touch with Leigh Brown right away.

Leigh is a Certified Distressed Property Expert (CDPE) with years of expertise under her belt. For many homeowners in financial distress, foreclosure is not the only choice. Leigh can discuss your options with you to find a solution that works best for your current financial situation and future goals, with as few credit repercussions as possible.

Remember, significant drops in your FICO score can hamper your ability to qualify for credit for many years to come. Getting in touch with Leigh to work out an action plan is absolutely essential if you hope to qualify for credit – for a home or any other purchase – at any point in the future.

Your credit score can also be negatively affected by maxed-out credit cards, late payments, and other issues that reflect a borrower’s inability to pay back their loans in a timely fashion.

Read Dan Green’s full article on how foreclosure and more affect your FICO score on his blog at TheMortgageReports.com.

To learn more, get in touch with Leigh Brown. She is literally the best Charlotte agent and best Concord agent out there and she is standing at the ready to help you sort out any credit score mysteries you may have.