You can expect to see most major accounts that you are responsible for, such as your mortgage loan and credit cards, appear on your credit report. When you are unable to pay your debts and forced into foreclosure or bankruptcy, that fact will appear on your credit report as well.
Facts
Bankruptcy and foreclosure are entered into the public record and have a negative effect on your credit.
Features
A foreclosure or bankruptcy can cause your credit score to drop hundreds of points. Each person will be affected differently, depending on what information is already contained within his report.
Time Frame
The Fair Credit Reporting Act dictates how long entries may remain on your credit report. A foreclosure will only appear within your credit file for seven years. A bankruptcy, however, can report for up to 10 years.
Considerations
The more recent a credit report entry is, the greater its impact on your credit score. Thus, you can rebuild your credit over time even with a bankruptcy or foreclosure on your credit report.
Warning
If your mortgage lenders sues you for the amount you still owe on the loan after the foreclosure and wins, a judgment will appear on your credit report. A judgment is a significant negative item and can damage your credit score even further.
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