Have you been foreclosed on? Just because you have gone through foreclosure, does not mean you will not be able to purchase another home. However, you will first need to take care of your credit rating, and here is some advice.

Typically, a foreclosure can cause a homeowners credit to drop anywhere from 200-300 points. A drop that significant can easily make a credit rating fall from good to bad. Scores this low will affect your ability to get a car, and even some jobs. A low credit score can even lead to a homeowner being denied credit, forced to pay high rates, or even being denied other things such as insurance.

Do not lose faith though. Foreclosure can stay on your credit score for up to seven years, but it will not ruin your credit rating for the rest of your life. Fico and credit scores can start to recover in as little as 24 months should you be able to keep your other financial obligations in order. The affect a foreclosure will have on your credit rating and fico score will be greatly reduced if that is the only negative remark. Actually, the FHA (Federal Housing Authority) now allows people to get approved for a mortgage, as long as the foreclosure has been at least 5 years in the past. So overall, it really comes down to you being able to keep up with your other financial demands after a foreclosure, when figuring out your credit worthiness.

When it is all said and done, mortgage foreclosure will not ruin your credit rating for the rest of your life. While their will be a period in which you have bad credit, it is easily reversible with wise, smart financial decisions.

-M Petrone

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