How Long Does Foreclosure Stay on Your Credit?

Video Transcript

"Hi this is Matt McKillen with Innovative Financial Group. The question that was posed to me today was how long does a foreclosure stay on your credit report? Well first of all let me explain to you there are three credit reporting agencies. There is Transunion, Experian and Equifax. All of them abide by basically the same reporting rules. Now a foreclosure is treated like any type of derogatory item whether it be a repossession of a car, whether it is a charge off on the credit card or a medical collection. The rule of thumb is that those type of accounts including a foreclosure will actually stay on your credit report for a period of seven years. Now if you file a bankruptcy a Chapter 7 or 13, bankruptcies will actually stay on your credit bureau for a period of up to 10 years so even though that foreclosure may be on your credit report for seven years it does not mean that you have to wait seven years to purchase a home. Traditionally usually the waiting period after foreclosure actually to be able to get a new mortgage is around three years, that may be change in going forward because a lot of good people in our country right now that are experiencing financial difficulties would want to see people back out on the market buying homes so I am hoping that loosens up in the next year or two but on average it will be three years you will have to wait to be able to purchase a home again but it will stay on your bureau for a period of seven years. Again my name is Matt McKillen and I'm with Innovative Financial Group."