Don't be fooled, you are judged on your credit report and score. Your credit is a heavily weighed factor when buying a car, renting a home, getting a job, applying for a loan, determining the cost of insurance and much more. Sadly, most people don't realize the importance of their credit until after foreclosure.
Foreclosure is one of, if not the biggest bombshell on your score. Alex Charfen, CEO of the Distressed Property Institute states "I have personally seen a short sale only lower credit scores by as little as 50 points, as opposed to the 250 to 300 point drop from a foreclosure. Additionally, the credit effects of a short sale can be as brief as 12 to 18 months, whereas a foreclosure will typically impact your credit score for more then three years".
Many lenders are open to a short sale to avoid a foreclosure even when the borrowers are still current. Often homeowners ignore the early warning signs of foreclosure until they are in deep default. Acting before missing your first payment truly mitigates the devastating damage of foreclosure on your credit.
[Whether the bank forecloses on your house or you walk away, the impact is the same, says Craig Watts, senior national public relations manager with FICO, the creator of the FICO credit score. "A person's credit report doesn't include information about assets, income or the ability to pay," he says. So a person or scoring formula that sees ‘foreclosure' on the credit report doesn't know why the borrower stopped paying, only that she or he did."] Amy E. Buttell, Cyberhomes Contributor Published: January 21, 2010 reported
Another important tip to know is that presently a short sale is not specifically reported on a credit report. A foreclosure is reported for at least 10 years, so those looking for employment, seeking a security license or working in the finance field may find road blocks toward a better future when your credit report comes back to haunt you. There is a big difference between Short Sale vs a Foreclosure.
Mike Sher of Max Broock Realtors Bloomfield Hills is offering free foreclosure avoidance with Short Sales seminars at 6pm on , 8/17/10, 8/23/10 9/14/10 and 9/28/10 Call him at 248-644-4700 x242, email: team@MikeRealtor.com. Also learn more at www.ShortSaleOaklandCounty.com
Mike Sher
The Mike Realtor Team sells Homes in Bloomfield, Birmingham, Beverly Hills, Farmington, West Bloomfield. Rochester, Troy, Novi, Huntington Woods, Royal Oak & Auburn Hills. Call us at (248) 644-4700 X 242 or check us out at www.ShortSaleOaklandCounty.com or www.mikerealtor.com Mike Sher
