How Being Late on Mortgage Payment and Foreclosure Impact Your Credit Score

CNN Money lists the following as the hits your credit score will take if you have trouble paying your mortgage (or worse):

• 30 days late: 40 - 110 points
• 90 days late: 70 - 135 points
• Foreclosure, short sale or deed-in-lieu: 85 - 160
• Bankruptcy: 130 - 240

Ouch! Those are painful!

And when I say "painful", I mean painful to your pocketbook. After all, having a bad credit score can cost you $200k -- and almost all of the above pretty much guarantee that you have a bad credit score.

Now tell me that the borrower isn't servant to the lender (as some have tried to do.) Looks like you better toe the line, Mr. Servant. If you don't pay your debt on time it will hurt you in more ways than one.

Comments

[Squirrelers]

The borrower is servant to the lender, absolutely so in terms of money.

Live within your means, spend less than you earn, absolutely limit your financial obligations, and accumulate assets. Do those things, while maintaining your income generating capacity and your health, and you'll be free - as opposed to being in servitude.

[ACS]

A relative is contemplating walking away from her condo, saying someone told her the hit to her credit would only be about 50 points. I do feel bad for her since she was a first time home buyer and kind of got strong-armed by her mom into buying in a trendy area at the height of the market. So now she is very upside-down on the place. On top of that she has an ARM. I'll be sure to point her towards this article, since these numbers are much higher than what she thinks they'll be.

[Kyle C.]

This is one of those factors people tend to overlook when they talk about walking away from their upside down mortgages. If you can pay you are better off paying in the long run. The damage to your credit is going to take years to repair, suck it up and keep on trucking.