How Does a Foreclosure Affect My Credit and My Future Options?

Needless to say, your credit score will be negatively affected after a foreclosure. The drop ranges from 85 to 200 points. If you had a higher original credit score, a foreclosure will affect your credit more than a person with a lower original credit score.

You should also know that even before a foreclosure, your credit score has probably already been hurt substantially. For example, if you are 30 days late on your mortgage, your credit score could already drop by 80 to 110 points. By the time you are 90 days late, you may already lose about 80 to 130 points.

In addition, a foreclosure, on average, will stay on your record for 7 years. If you went through a judicial foreclosure, the court record will also stay in the court's public record for about 7 years from the date of the decision. Your will be able to gradually raise your credit score after the foreclosure during that 7 years, but you will not be able to fully regain your credit score until the foreclosure is off your record.

Unfortunately, after a foreclosure, you will face difficulties applying for new lines of credit, including credit cards or new loans. Even if you are approved for new credit, you will likely need to pay a higher interest rate.