Short Sale vs. Foreclosure – Affects on Your Credit Score
Foreclosures can greatly affect one’s credit score, but you can avoid it if you have control over your finances to begin with. If you have been included in the foreclosure listing, it can decrease your credit score by up to 250 points. What about short sale transactions? Watch this video.
Video Rating: 0 / 5
Categories: Credit Score Videos Tags: Affects, Credit, decrease, Foreclosure, Real Estate Attorney, sale., Score, Short, short sale, Video Rating, Watch
Foreclosure and Its Effect on Your Credit Score
Foreclosure is the lawful procedure that terminates the rights of a homeowner and gives the ownership to the mortgage lender. This happens when a homeowner fails to pay the monthly mortgage payment as agreed upon.
Foreclosures can greatly affect one’s credit score, but you can avoid it if you have control over your finances to begin with. If you have been included in the foreclosure listing, it can decrease your credit score by up to 250 points. The severity of this damage, however, depends on your credit history.
If you have been paying your credit card bills and other loans on time, it can positively alter the impact of the foreclosure. If the amount of your current debt is considerably lower than the amount of your available credit, then the effects of the foreclosure on your credit score can also be tempered.
Payment history makes up 35% of your total credit rating, and your late mortgage payments are included here. Current debt makes up 30%, the length of your credit history accounts for 15%, your credit card and installment loan balance makes up 10%, and your recently opened credit account makes up 10%.
Foreclosure accounts are normally listed in the Public Information category of your credit report and it will be there for seven long years. However, during that period, the effects of the foreclosure on your credit score lessen as each year passes by. New home loan applications will be considered three years after a foreclosure.
If, by error, the foreclosure is still present in your credit report even after seven year, you can file a complaint so that the credit bureau will have it removed. The three credit bureaus that are held accountable for the information in your credit file are TransUnion and Equifax and Experian.
If you’re not good at handling your credit, a foreclosure is inevitable. And even though the effects of foreclosure lessen with time, you still don’t have an excuse to live outside your means.
Related Credit Score Articles
Categories: Credit Score Articles Tags: credit score factors, file, Foreclosure, foreclosure effects, history, house foreclosure, year
Why Mr. Credit says Short Sale vs. Foreclosure
Short sale and foreclosure are among the stuff that a lot of people want to know more about. This video talks about secured credit cards, when to pay your CC bill, power of an auto loan, paying off collections, among many others.
Several ignorant sources would just tell you to walk away from your own home after getting your free stay for as long as possible. This will surely destroy your credit profile.
Watch this video and get general tips on bettering credit scores and avoid the usual mistakes.
Video Rating: 5 / 5
Categories: Credit Score Videos Tags: Credit, Foreclosure, short sale
Rebuilding Credit Score after Foreclosure
A lot of people are suffering from low and bad credit score because they tend to splurge on so many things that they don’t really need. While a short sale can be daunting to your credit score too, it can be one of the most helpful ways to stop foreclosure from damaging your life and leads to bankruptcy later on too.
There are lots of helpful ways that can be helpful in establishing good and positive credit ratings and be able to boost your credit score too in time. Here are some of the simplest things you need to do to rebuild your credit rating after a short sale:
1. You need to get a secured credit card or loan. There is lots of it these days so you don’t have to worry about it anymore.
A lot of people don’t know that having a lot of credit card can also be helpful in the long run because you can use your other cards or loans as backup or even collateral. You don’t have to be confused because with a 2nd or even 3rd card, you will be able to use it for the bank or when the credit bureaus asked for collateral.
2. You need to use your credit card wisely. It will be best if you will only be using your credit card to buy all the things that are importantly needed and not to waste your credit on things you don’t really need. It will be helpful in lessening your debts.
3. A lot of people don’t know that a positive rental history will also save you from the devastating result of bankruptcy and foreclosure.
If you went through a short sale you will not qualified for a mortgage loan for about 2 years. During this time, you need to establish a good rental history to build up your credit once again. You need to be a responsible tenant to your landlord so that you will be able to establish yourself again and move forwards after sometime of being low.
4. You need to always remember that paying your bills on time will be favorable to you because you will not be going through tough times by paying your debts on time. A lot of people don’t know that they are risking themselves by neglecting to pay for their bills on time. It will be helpful if you will be paying early on so there will be no troubles later on in life.
5. You should also monitor your credit report so you will not be experiencing errors when it comes to getting the reports of your account. It will be best if you will monitor closely on your credit reports so if there are errors you can easily inform the credit company.
Life is tough these days so you need to be wiser and you need to be very careful with your deals. It will make a big difference if you will closely monitor your spending and earnings so you will not suffer.
Karen Anne, has been working on CheapHomesListings.com studying the foreclosures market, helping buyers on the finer points of foreclosure.
Categories: Credit Score Articles Tags: after, Credit, Foreclosure, Rebuilding, Score