How long do bankruptcies and foreclosures stay on a credit report?
One of the most fundamental issues involved in selling a home is finding your next home. Unless you have a second home or have previous housing arrangements, it is important that you find another home prior to selling your home. However, one lingering issue that may cause difficulty in finding a new home is whether you had previously filed for bankrupts or have been foreclosed.
Filing for bankruptcy or being foreclosed is not necessarily an embarrassing thing. In many situations, it is caused by outside circumstances like an employer having financial difficulties. However, a question that you have to ask yourself is, 'How long do bankruptcies and foreclosures stay on a credit report?'
The Answer
The answer to this query is that there is not a specific timeline for how long bankruptcies and foreclosures stay on a credit report, although they can remain on a credit report for seven to ten years. However, just because bankruptcies and foreclosures may still be present on your credit report does not immediately mean that you will be rejected for a loan.
Rather, there is still some flexibility remaining in this situation. In many cases, lenders will consider a potential borrower earlier than those seven to ten years if the borrower has already reestablished good credit. Additionally, the reasons and circumstances that caused the bankruptcy is also a factor. For example, a lender is more likely to be sympathetic if your bankruptcy was caused by the poor luck of being financially under prepared at a time when your employer suddenly encountered financial difficulty. However, in circumstances where your bankruptcy was caused due to financial mismanagement such as overextending personal credit lines in order to finance a lifestyle that you weren't able to afford, the lender will be less inclined to be flexible. Still, it is important to explore all of your options if you had previously filed for bankruptcy or had experienced a foreclosure.
