How Foreclosure Affects Your Credit

How long items stay

Late payments and a completed foreclosure can generally remain on your credit report for up to seven years. The impact fades over time, especially as you add positive history.

Comparing paths

• Selling before auction (paid in full): generally the least damaging beyond the late payments.
• Loan modification: late payments remain, but the account can return to current.
• Short sale or deed in lieu: reported as settled for less; typically less severe than a foreclosure judgment.
• Foreclosure: usually the most serious, and can lengthen waiting periods for a future mortgage.

Rebuilding

• Pay every current bill on time.
• Keep credit card balances low.
• Check your reports for free at AnnualCreditReport.com and dispute errors.