| Your credit report and FICO score both are very | | | | continue to decrease if not taken proper care of. |
| crucial. FICO score is something which appears on | | | | 2. If you would not improve your habits of making the |
| your credit report and is an indicator of an individual's | | | | payments on time and clearing of all your debts, your |
| efficiency and commitment towards making the | | | | score would be low. However, if after foreclosure you |
| mortgage payments. A good score is a reflection of a | | | | start making regular payments and clear all the existing |
| good credit report and the vice versa. | | | | loan amount; the trans union, Equifax and Experian will |
| Today's economy condition is such that thousand's of | | | | increase the FICO score and your credit report would |
| homeowners are not able to repay their existing home | | | | improve. |
| loans and are facing foreclosures. A loan foreclosure | | | | But, the question arises of the million homeowners who |
| is the only option that they think they are left with. But | | | | are facing troubles in making their loan payments. |
| what they do not know is how badly can a | | | | What option are they left with if they do not foreclose |
| foreclosure affect their credit report and decrease | | | | their home? Well this is to inform you all that, |
| their FICO score. | | | | foreclosure is not the only option you guys are left |
| Let us take a review on how a foreclosure will impact | | | | with. Here is what you can do: |
| the FICO Score of a homeowner: | | | | * Loan Modification and a Refinance is what you can |
| 1. Well first of all, a foreclosure stays in your credit | | | | opt for. A loan modification will revise your mortgage |
| report for seven years but it is generally seen for | | | | tenure with new terms and conditions which would |
| more than 21 years. Trans union, Equifax and Experian | | | | make your mortgage payments sustainable. On the |
| are the major credit bureaus of the United States. | | | | other hand, Obama's stimulus package offers |
| Your FICO score is calculated by these three | | | | refinance option for all the loan that are not being paid |
| agencies only on the basis of your entire payment | | | | due to financial crisis. As a result, your existing loan |
| record history. This score decreases when a | | | | would be closed and a new loan would be financed on |
| foreclosure is written in your credit report and may | | | | a lower rate with extended tenure. |