How foreclosure impacts credit scores

Learn how foreclosures may impact your credit scores and how you can begin rebuilding.

Facing a home foreclosure can be a scary and uncertain time. If you’ve been affected by COVID-19, you may be eligible for financial support from government programs. Check out Capital One’s self-service tool or these coronavirus relief options. It also might help to check out some nonprofit resources. 

And if you’ve been through a foreclosure, you might be wondering about the impact on your credit. Good news: It doesn’t last forever, and you can recover from it over time. Read on to learn how you can bounce back by taking steps to rebuild your credit. 

How foreclosure affects your credit

Foreclosure can happen after you’ve missed mortgage payments and your lender takes ownership of your home. A foreclosure might appear on your credit reports, as well as the missed payments that led to it. 

Credit-scoring companies use the information from your credit reports to calculate your credit scores. And payment history is an important factor in calculating your credit scores from both FICO® and VantageScore®. 

As a general guide, Experian® says that missing three or four mortgage payments by itself can decrease your FICO credit scores by at least 100 points. And foreclosure could take your scores lower. 

It’s hard to say what will be the exact impact of foreclosure on your credit scores, though. It can depend on several factors. These include which credit reporting agency provided the information and which credit-scoring model was used in the calculation.

How long does a foreclosure stay on your credit report?

According to the Consumer Financial Protection Bureau (CFPB), foreclosure can stay on your credit report for seven years. Experian says it’s measured from the date of the first missed payment that led to the foreclosure.

Ways to start rebuilding your credit scores

Fortunately, the impact on your credit scores doesn’t have to last forever. Rebuilding your credit scores will take time and consistent responsible credit use, but you can start straight away. Here are some ideas how:

1. Catch up on overdue bills

If you’ve struggled with making mortgage payments and paying other bills on time, you’re certainly not alone. A survey by the CFPB found that in May 2019, more than 40% of Americans had a hard time paying a bill or expense in the previous year. In many cases, the difficulty involved mortgage payments.

With that said, your payment history is an important factor in calculating your credit scores. And consistently paying bills on time is the best way to start getting your payment history back on track. As well as creating a budget, you could think about setting up automatic payments or reminder alerts to help you. 

2. Start with a secured credit card

If your financial situation permits, a secured credit card can be a good tool for rebuilding credit. As with any credit card, getting approved for a secured card isn’t guaranteed. Aside from a security deposit, there may be additional approval requirements.  

With consistent responsible use over time, a secured card—like the Capital One Platinum Secured card—might be able to help you rebuild credit. That’s as long as it reports to at least one of the three major credit bureaus.

3. Seek help from a professional

If you’re unsure how to get your finances back on track after a foreclosure, you can get help from a professional credit counselor. A credit counselor offers a range of services including debt management and budget counseling.

To find a credit counseling agency in your area, you can:

  • Call the National Foundation for Credit Counseling (NFCC) at 1-800-388-2227.
  • Check the NFCC website.
  • Check the Better Business Bureau to look up any credit counseling company you are considering to see if they are highly rated for their services and customer care.

4. Stay on top of your progress

You can get free copies of your credit reports at or by calling 877-322-8228. You may also want to consider CreditWise from Capital One. With CreditWise, you get free access to your TransUnion® credit report and weekly VantageScore 3.0 credit score without hurting your score. And it’s free to everyone, not just Capital One cardholders.

Recovering from foreclosure

A foreclosure should fall off your credit reports after seven years. But if that doesn’t happen for some reason, you can file a dispute with the credit bureaus to request that the foreclosure be taken off your credit report. 

Bouncing back from a foreclosure is doable given time and responsible future credit use. But be patient. Recovery takes time.

Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention

Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many credit scoring models. It may not be the same model your lender uses, but it can be one accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Some monitoring and alerts may not be available to you if the information you enter at enrollment does not match the information in your credit file at (or you do not have a file at) one or more consumer reporting agencies.

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