September 05, 2022

How Does a Foreclosure Affect My Credit Score in NY?

house model on foreclosure cubic blocks in front of judge holding malletBecoming a homeowner is the American dream, but life gives us hardships, making it difficult to meet monetary obligations. A foreclosure is what every homeowner fears most. Not only will you lose your home, but your credit rating will take a drastic hit!

The impact of foreclosure creates a landslide of other costly events—legal expenses and seeking a new residence are just two. If you are in danger of foreclosure or already in it, know how it can affect your credit score.

How Long Does Foreclosure Take in New York?

On average, in New York, a foreclosure can take two and a half years to complete the process. However, this time period depends on what part of New York you reside in.

For instance, Upstate New York foreclosures take approximately one and a half years. In comparison, areas near the New York City area can take up to three and a half years.

How Does a Foreclosure Affect My Credit Score

How foreclosure affects your credit score is dependent on your current credit score. The better your score is, the greater the impact a foreclosure has.

For instance, your credit can drop by at least 100 points if you have a good score. Excellent credit scores usually take a hit of at least 160 points.

To re-establish your credit following a foreclosure, you must have at least three years of on-time payments. If the foreclosure is the only negative mark on an otherwise impeccable credit report, recovery will be quicker. However, in most cases, a complete recovery following foreclosure takes three to seven years.

How Long Does Foreclosure Stay in Your Credit Report?

When your mortgage payment is over 30 days late, the lender must report the delinquency to all credit bureaus. It means that your credit is negatively affected even before the foreclosure starts.

Usually, failing to make a payment for 90 consecutive days will result in the bank starting the process of foreclosure. Because the process may take many months, every missed payment is reported. Thus, creating a serious impact on your overall credit rating.

Once the foreclosure process has started, you wonder how long a foreclosure stays on your credit report. A foreclosure remains a temporary part of your credit report for seven years. A foreclosure will then fall off the report; however, it often takes nearly 10 years for complete recovery.

How To Remove Foreclosure from Your Credit Report

After completing the process, you need to know how to remove a foreclosure from your credit report. Although your credit score has taken a negative hit, you can take the steps needed to ratify your future financial habits. The first and foremost step in this process is to ensure all future payments toward debt are made timely.

Some of the steps you can take to give your credit score a boost include the following:

  • Obtain a current copy of your credit report; doing so makes you aware of your current standing.
  • Make sure to get a report from all three major credit agencies: Transunion, Equifax, and Experian.
  • Verify any changes or errors that might be on the report. You can ask for assistance from a legal professional to dispute any errors or omissions.

Our New York Real Estate Can Help

The entire process of foreclosure involves complex legalities. When you are in foreclosure, your attorney will help to ensure all steps are taken correctly.

Your attorney has the knowledge to enforce all the policies, regulations, and rules regarding foreclosure. The attorney you hire will advocate throughout the process and ensure no errors or omissions occur.

Real estate and everything it encompasses requires a legal professional to protect your rights. If you are facing a foreclosure and need New York real estate attorneys that care — the Strazzullo Law Firm is here. 

During a foreclosure, should there be any disputes, our attorney will negotiate a resolution and represent you. The Strazzullo Law Firm has legal professionals that aid you and navigate the process, which includes protecting your interest.

Our New York real estate lawyer, will help you through the entire process of foreclosure. Call us today and schedule a free consultation with one of our legal professionals.