How does Foreclosure Affect your credit?

We have had a lot of clients ask us about how a Foreclosure affects their credit. We don't have the full answer for that yet. If you have been in foreclosure and know how this affected your overall credit score please let us know.

This article by Bill Bronchick gives us some insight on some credit questions.

"What Information is on My Credit Report and How Does it Get There?

Your credit report has "headers," which contains information about your addresses (every one they can find), phone numbers (even the unlisted ones), employers, social security number, aliases and date of birth. This information is usually reported by banks and credit card companies that report to the credit bureaus. Some information comes from public records.

TIP: Don't give your unlisted address or phone number to your credit card companies or it will end up on your credit file.

Your credit report also contains a history of nearly every charge card, loan or other extension of credit that you ever had. It will show the type of loan (e.g., installment loan or revolving credit), the maximum you can borrow on the account, a history of payments and the amount you currently owe. It will also show information from public records, such as judgments, IRS liens and bankruptcy filings. Some debts are reported by collection agencies, such as unpaid phone, utility and cable TV bills. Your credit report will also show every company that pulled your credit report within the last 2 years (called an "inquiry").

How Long Does information Stay on My Credit Report?

In theory, forever. However, federal law (Fair Credit Reporting Act) requires that any negative remarks be removed upon request after 7 years (except for bankruptcy filing, which may remain for 10 years). If you don't ask, it won't go away.

How Do I Get Information Removed From My Credit Report?

You will find some information that is just plain wrong. Accounts that are not yours, judgments against people with similar names and duplicate items are very common. Some items are more subtle, such as the fact that a debt is listed as still unpaid when in fact is was discharged in your bankruptcy. Ask the credit bureau in writing to re-investigate the information. Under federal law, the bureau must reinvestigate and report back within 30 days. In some states, the law requires a shorter time period. If the bureau does not report back within 30 days, the item must be removed.

TIP: Send your letter by certified mail, return receipt requested.

If you do not get results within the time period specified by your state law or the F.C.R.A., you can write a sterner letter threatening to sue under state or federal law. You can also try to contact the creditor directly. Keep in mind that a creditor may also be liable for reporting wrong information. Before jumping into court, try contacting your regional Federal Trade Commission office and your state Attorney General's Consumer Fraud Department.

How Do I Get Negative Things Removed From My Credit Report?

If you have "bad" items, such as late payments, charge-offs, judgments and a bankruptcy, the credit bureaus can legally report this information. However, if the information is stated in an incorrect or misleading format, you can still ask the bureaus to reinvestigate the information. Sometimes you will get lucky and the bureau does not report back within 30 days. In this event, the information must be removed.

TIP: Do not be too specific with your request.

For example, if a bureau reports that you had a judgment against you and it was paid, do not volunteer that information (a judgment rendered and paid is still worse than no judgment at all). Simply state that the information is incomplete and request that it be re-investigated. In some cases, it is less work for the credit bureau to remove the item than to re-check it."www.reiclub.com