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Foreclosure can damage credit score for years
By Oscar Monfort on Jun 22nd, 2010
A number of things can put a real damper on a credit score, including not paying off card debt or falling behind on a mortgage.
However, given that many homes saw their values drop during the recession, some consumers are actually opting to walk away from their properties rather than pay off high home loan debt tied to these houses. Still, a recent post on personal finance expert Liz Pulliam Weston's website noted that there could be severe consequences in doing so.
For example, doing so could lower a consumer's credit score for years, making it more difficult to get a loan in the future.
"Recovering from such credit blows is tougher than it was a few years ago, when lenders were still eager to give money to people with shaky credit," Pulliam Weston wrote.
Along with receiving consumer credit counseling, which can help with home loans, people may be able to tackle their tougher bills with debt consolidation. This option could lead to lower interest rates on credit card debt, which should make it easier to pay.
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