You might feel that after you had continuously piled delinquent payment slips and arrears for the past few months, your credit score has already plunged down to a score you never thought you will get. Yes, I must agree that it is unfortunate. However, you need to realize that people all over United States also suffer from the same case you are currently experiencing now. The good thing about this is that you are not alone in this plight.
The blemishes are there, but you can still do something about it. The exact reason why we don't call it a permanent scar is because blemishes are easier to erase. However, there are certain credit blemishes which do not disappear overnight, not even in a few weeks or a month. Blemishes like a delinquent payment you made once and never again in a span of 7 months is fine. But repeated delinquent payments, arrears, unpaid utility bills and others which are not paid outright in a span of 3 months will be hard to repair.
Although this scenario is not as serious as undergoing a foreclosure, or much worse a bankruptcy, it is still a something that will leave your score suffering for quite a while. And just try to imagine how a foreclosure will drastically affect your score. The mere presence of it in your history will definitely leave you about 200 points lower in your FICO standing, depending on the severity of the case (read: how much money was involved, how much debt was incurred and how much the property amounted to). A bankruptcy on the other hand will have to stay on your records and will continuously reflect on your credit score for a span of 10 years, as the law provides.
As far as foreclosure and bankruptcy are concerned; the best thing to do is to make the necessary sacrifice to avoid the two scenarios as much as possible. Because resorting to these options must only be done if there is really no other way out of the situation.
Also it will be best to look for remedy for your bad credit which may contribute to a low score. It will not help your credit score much if you chose to wait for 3 months before you thought of doing something to lessen the impact of delinquent payments and bad credit to your score. Better start reaching your credit company's office landline now. Talk about how you could settle your debt. You might agree upon monthly installment terms lower than previously discussed.
The blemishes are there, but you can still do something about it. The exact reason why we don't call it a permanent scar is because blemishes are easier to erase. However, there are certain credit blemishes which do not disappear overnight, not even in a few weeks or a month. Blemishes like a delinquent payment you made once and never again in a span of 7 months is fine. But repeated delinquent payments, arrears, unpaid utility bills and others which are not paid outright in a span of 3 months will be hard to repair.
Although this scenario is not as serious as undergoing a foreclosure, or much worse a bankruptcy, it is still a something that will leave your score suffering for quite a while. And just try to imagine how a foreclosure will drastically affect your score. The mere presence of it in your history will definitely leave you about 200 points lower in your FICO standing, depending on the severity of the case (read: how much money was involved, how much debt was incurred and how much the property amounted to). A bankruptcy on the other hand will have to stay on your records and will continuously reflect on your credit score for a span of 10 years, as the law provides.
As far as foreclosure and bankruptcy are concerned; the best thing to do is to make the necessary sacrifice to avoid the two scenarios as much as possible. Because resorting to these options must only be done if there is really no other way out of the situation.
Also it will be best to look for remedy for your bad credit which may contribute to a low score. It will not help your credit score much if you chose to wait for 3 months before you thought of doing something to lessen the impact of delinquent payments and bad credit to your score. Better start reaching your credit company's office landline now. Talk about how you could settle your debt. You might agree upon monthly installment terms lower than previously discussed.