At
the present time, people have become dependent on credit. Almost everybody have
their share of credit in varying amounts. In this article, we will explore the
credit score or rating, its importance, and the factors that will affect its
value.
When
you use a credit, you are borrowing money with a promise that you will pay it
back within the agreed time. It is the same as acquiring a home loan wherein
you borrow money from the bank to finance the purchase of your new home. Credit
bureaus will determine your score based on different factors, namely; payment
history, overall credit over amount borrowed, length of credit history, new
credits, and types of credit. A good credit rating is important because when
you apply for a home mortgage, credit card, or even phone hookup, your credit
score is checked. The higher the credit score, the more chances of getting a
successful application.
One
of the factors that greatly affect your credit score is foreclosure. It is the
result of missing payments on your home mortgage allowing the bank to repossess
your home. How bad will foreclosure affects your credit score? There is no
definite answer to this. It will depend on different situations. For example,
at the time that you have undergone foreclosure, the amount due is only 20% of
the total amount owed, the impact is less when compared to the amount due which
is 50% over the total amount owed. The number of late payments that precedes
foreclosure will also have a different impact on your credit score.
Fortunately,
there is much you can do to avoid foreclosure and save your credit score. When
facing foreclosure, you can apply for loan modification, undergo short sale, or
even sell your home. Although the latter options will lead you to losing your
home, without foreclosure on your credit report you can easily apply for a
second mortgage.
Sell
your home to Lucas Properties LLC; a private property investor that has been in
the industry for quite some time and has helped many owners with distressed properties.
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