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.