How long does foreclosure stay on your credit?
To know how long does foreclosure stay on your credit it is first and foremost necessary to understand what are the affects and reasons that bring about foreclosure. Foreclosure is when the owner of a property is not able to pay the interest amount or the principal amount on the mortgage. In this scenario the lender has the right to seize the property and sell it according to the terms and conditions of the contract of mortgage.
Avoiding foreclosure is better than asking how long does foreclosure stay on your credit, and there are some ways by which a foreclosure can be avoided where some adjustments are made by the creditors to reschedule the payment to retain the ownership of the property also known as mortgage modification. In the present circumstances of economic recession many property owners have no choice but to foreclose on the mortgages. Regarding how long does foreclosure stay on your credit it is best that foreclosure is avoided. Some of the ways by which a foreclosure can be avoided are: Special forbearance; Mortgage modifications; Partial claim; pre-foreclosure sale; and finally deed-in-lieu-of-foreclosure. However it is the lender who decides if you can qualify for any of the different alternatives by which you can avoid foreclosure. To get help you can always consult with a housing counseling agency. These agencies become the mediators between you and the lender and can give you a proper advice regarding this matter.
However once you have faced foreclosure it is bound to get registered in your credit reports. So how long does foreclosure stay on your credit? Generally a foreclosure stays on the credit report for a minimum of 7 years as opposed to bankruptcy that remains for 10 years. For a mortgage lender a foreclosure is a serious thing. A foreclosure is defined as an event of drastic negativity on the credit report but it does not have the affect of ruining the credit score forever. If all the credit obligations are well tended and kept in check the credit score are likely to restore in less than two years of time. A foreclosure might be a negative term in the credit report yet if you have a history of bankruptcy or hard inquiries then it is likely that it will ruin the credit score so long does foreclosure stay on your credit.
Concerning how long does foreclosure stay on your credit, from the date of filing the foreclosure legal activity stays on the credit report for seven years, add to that a number of 180 days from the date of the actual foreclosure. The property owners however can make a formal request to the company dealing with the mortgage to delete the foreclosure off the credit report. Even the lenders and the bank can take out the information regarding foreclosure from the credit report of the debtor, although the chances are very rare of convincing a bank to do it but one must always try at the least.