Credit Advice

The impact of foreclosure on your credit report

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Credit Advice

The impact of foreclosure on your credit report

Dear Experian,

With all the real estate and mortgage problems today I am sure this question has come up before. But, for some reason I can’t find any information on any of the credit bureaus websites. How do the credit bureaus look at a foreclosure on a person’s credit report? Is it as bad as a bankruptcy? How many years does it take for it to go off the credit report?

- LLE

Dear LLE,

Credit reporting companies don’t make judgments about the information in credit reports. The credit reporting companies simply show what is being reported them. Lenders decide what the information means to them.

That said, a foreclosure in your credit report is typically looked at by lenders as very negative. It may not be as bad as bankruptcy, but not paying your mortgage and losing your house is very close.

The presence of a foreclosure on your credit report probably will make it difficult to obtain new credit at the best rates, especially if you also have problems with other credit accounts.

A foreclosure remains on your credit report seven years, so it will have a long-term effect on our creditworthiness. But, because negative information is deleted eventually, you can rebuild your creditworthiness if you take control of your debts and build a history of positive payments that will continue to appear after the foreclosure disappears.

Thanks for asking.

- The "Ask Experian" team

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