Florida Lawyer Blog

Have you recently filed bankruptcy or faced foreclosure procedure? Then you might be wondering for how long the effect of bankruptcy or foreclosure stays on your credit report. Both these procedures can lower the FICO credit score and you might find it difficult to get approval for loans in future. Therefore, if you are struggling to get out of debt then it is advisable to enroll in a debt relief program. If you are a citizen of Florida then you can browse the internet by “debt settlement Florida”. This will help you find many debt settlement firms of that state and these agencies might guide you to liberate your debt. You need to read through the article to know the duration of the effect of bankruptcy or foreclosure on your credit report.

Debt stricken consumers often declare bankruptcy when their liabilities exceed their available cash. There are many consumers who drain their bank balance because of poor money management skills. Few consumers have been forced to file bankruptcy as many people suffered a job loss and unemployment after the recent economic meltdown. Therefore, bankruptcy helps to give a fresh start but the credit score might drop as the information is displayed on the credit report for 7 to 10 years.

If you default on your mortgage payment the lenders or bank can foreclose on your property. There can be many reasons for the foreclosure procedure like high mortgage payments, fluctuating interest rate, divorce, job loss and so on. If you undergo foreclosure procedure then your credit report will be adversely affected and it will remain on your credit report for seven years.

Your credit score might drop if you declare bankruptcy or undergo foreclosure procedure. Your credit score might drop by 100 points on declaring bankruptcy as per the Consumer Credit Counseling Service. But if you undergo foreclosure then your credit score can drop by 200 to 300 points. The effect of bankruptcy or foreclosure might vary in case of each consumer. You might face impediment while getting approval for loan application if you have low credit score. There are few lenders who might give loan to bankrupts but on high interest rate.

How can repair your credit rating?

If you give effort then you can easily reestablish your credit rating but remember that it might not be able to repair your credit report overnight. After you have discharged your debts through bankruptcy then start working on repairing your credit report. You can apply for a secured credit card against security deposit. Make sure that you sent the bank reports to the bureaus as it will help to repair your credit score. If you make your payments on time then it will help to reestablish your credit report. If you pay off the remaining debts on time then it will help to avoid damaging your credit and guide you to rebuild your score.