The Fair Credit Reporting Act permits foreclosure for seven years in a consumer credit report, but it can be removed earlier in the correct circumstances.
Foreclosure is a civil proceeding arising from unpaid charges on a house, typically a home. As it is a legal matter, a foreclosure can have a strong effect on a credit rating of a person, reducing their credit score by as much as 250-280 points.
A foreclosure is normally recorded for seven years after the action is first recorded. This can be completely life-shaking because a victim of foreclosure will not only lose her property but will also be unable to apply for a loan for a very long time.
Recovering From A Foreclosure In Less Than 7 Years.
Although a foreclosure can only destroy the credit, the end of a good credit rating does not have to be. Indeed, many claim that they have earned enough score after just 3 years of rebuilding their loans by prompt payment activities to obtain a new loan with reasonable interest rates.
Another secret that many customers do not realize is that the bank or insurer will simply delete the prediction directly from their accounts. It is the choice of the lender to report any offenses or foreclosures to credit tracking agencies and they can also decide to have them removed at all times.
Unfortunately, since an agency is not encouraged to do so, removing the foreclosure report is a rare event, particularly for consumers without an agency.