CHAPTER 14 Tips for Boosting Your Credit Scor edit Score
If you’re unable to do anything to save your home, and must allow it to go up for auction, there are credit and tax implications. Also, be ready to rebuild your credit profile. Once a home is lost to foreclosure, the homeowner’s credit score can drop by as much as 250–280 points. The credit rating will be restored after payments have been made on time for three years. If the credit score is otherwise sound, and the foreclosure was an isolated event, homeowners could rehabilitate their records in two years. This situation is rare, however. Foreclosure typically involves escalating rates, pushing the individual into more debt. The long-term consequences of foreclosure include years of limited and expensive credit, which can make financial recovery a challenge. Most borrowers want to see a credit score higher than 620 to qualify for a conventional loan. This score becomes increasingly
116
Powered by FlippingBook