Foreclosure is a legal proceeding used by a mortgage lender to take ownership of your home if you default on your mortgage loan.
Once the foreclosure proceedings have started, your account will be updated to show that it is in foreclosure. The status of the mortgage entry in your credit report will also be updated to show that the mortgage is in foreclosure.
Foreclosure is considered a final status for a mortgage in your credit report, similar to a repossession for car loan.
A mortgage account reported as in foreclosure will appear on your credit report for seven years from the original delinquency date of the account. The original delinquency date is the first missed payment that led up to the foreclosure status. The account will be automatically deleted after seven years.
Foreclosures are considered very negative and will have a significant negative impact on your creditworthiness and credit scores. If you've had a foreclosure in the past, you can begin rebuilding your credit history by ensuring all the payments on your other accounts are made on time, paying off any other past due debts, and keeping your balances low on your credit card accounts.
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Scoped on: 6/8/2017