Does a resolved pre-foreclosure look better on your credit report than a completed foreclosure?
Question:
Answer:
If I understand you correctly, you are asking about the following 2 situations.
1. You get behind, but you actually pay the lender what you owe.
2. You get behind and the lender has to take the house.
If that is your question, option 1 looks better to anyone sane.
Without a doubt the foreclosure that goes to auction will hurt more. We have seen people with a 700 credit score go the the high 400's because of a foreclosure.
Here is a recent blog post on our site that deals about credit and foreclosure:
http://www.afscanhelp.com/blog/2007/4/ho...
Yes, it will. If the loan is paid off in full, then the credit report will reflect the Paid In Full status of the mortgage. This will make the homeowners' credit look slightly better, because it shows that they made good on their obligation to pay back the loan they had taken out. A foreclosure shows that the homeowners could not meet their obligations and the home had to be sold to recoup the loss by the bank.
However, the homeowners' credit situation will be determined by the entire picture, including all of the late payments. If they had late payments for months on the mortgage, but kept up on the other bills, then the credit may not be affected too negatively. If they were behind on credit cards, car loans, and everything else, and many accounts went into collections, the foreclosure may just contribute to the decline in their credit score.
But, in general, having a Paid In Full status will be much better than having a full foreclosure on the credit report.
Good luck.
ForeclosureFish
http://www.foreclosurefish.com/...
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