Let's tell you that to what extent the foreclosure affects your credit card.
How your credit score gets hit during a foreclosure?
On an average, the drop due to the foreclosure depends on the current credit score you are having. If your credit score is 680, the drop will be 80-105 points and if the credit score is 780, the drop will be 140-160 points. To say in short, higher your credit score is, bigger will be the drop. So, if you are having a higher credit score, you need to be more careful before foreclosure.
In general, if you are 30 days late on your mortgage payment, your credit score will drop by 40-110 points; in the case, you are 90 days late, the drop will be 70-135 points and in the case you file a bankruptcy, the credit score will drop by 130-240 points. Also, the drop will be same in the case of a short sale, deed-in-lieu and foreclosure, which will be 85-160 points.
For how long the foreclosure stays on the credit report?
In general, the foreclosure remains on the credit report for a period of 7 years which will start from the date of the disposition. Though the credit score will improve in this period if you would remain regular with the payments but the full improvements will only occur when the foreclosure will be removed from the credit report.
Furthermore, if you have gone through foreclosure and need financing in the future, you would need to pay higher interest rate. That's why you are recommended to avoid taking loan until the foreclosure is removed from your credit report and your credit score is improved.
If you have bought a mortgage and are expecting to be late on your payment, it would be better to work out with your lender for the alternatives so that your credit score will not be affected. And if you are missing your payments from past three months and have obtained the notice of foreclosure, it would be better to seek help from an experienced Houston foreclosure agent to know the options that would affect your credit score to the least.