How Mortgage Delinquency Affects Your Credit Report

Mortgage delinquency is something all homeowners should do their best to avoid. Though it won't immediately destroy a credit rating, the long term affects, especially if the delinquency is recurrent or extended, can be devastating to your credit score. With a reduced FICO score it can be difficult to obtain financing for a car, home or any sort of loan or even a credit card account. 

What a 30 Day Late Payment Does to Your Credit Score

A 30 day late payment will greatly reduce your FICO score for the month of the delinquency, but as time goes on, it will have less and less of an impact on your score. The lender probably won't even notice the missed payment for another month or so, because there is a grace period on mortgage payments to help ensure borrowers have an easier time making their payments regularly and on time.

What a 60 Day Mortgage Delinquency Does to Your Credit Score

A 60 day mortgage delinquency is where it starts to do some major damage to the credit score. This is where the lender is going to notice the lack of a payment last month. You'll be given some time to get your account current, but if it isn't handled soon, foreclosure proceedings will begin, which will severely diminish your credit score and prohibit you from getting another mortgage for at least three years.

What a 90 Day Mortgage Delinquency Does to Your Credit Score

At this point, foreclosure has likely started. If not, it will be soon. These payments will make your FICO score go down for a considerable amount of time, affecting it for at least two years. The more of these you have, the worse it will be. Your credit will be affected for two years from the date of each one, so they will drop of accordingly.

What a 120 Day Mortgage Delinquency Does to Your Credit Score

At this point, the lender has likely taken all the necessary steps to foreclose on the home. If you are still living in it at this point, it is safe to say you won't be for long unless you have made arrangements to bring the loan current. At this point, your credit score has suffered the most possible damage that it will without a foreclosure on record. This will make it difficult to refinance the home at a lower rate and to obtain further credit for other purposes.

The best way to avoid all of this mess is to make your mortgage payments on time. Keep at least an extra payment, if not three, in a savings account at all times so that if something happens and you make less money than usual, you can pay your mortgage on time and not have to worry about how mortgage delinquency affects your credit report. As soon as things return to normal, replace the savings to stay ahead all the time. 

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