My Real Estate Blog

1)   Deadbeat Behavior. Frequent, significant and late payments 30, 60, or 90 days late. Don't believe a 30-day-late payment won't hurt. It may not ruin your credit but it's not helpful and can remain on your report for seven years.

2)   Collection Activity. When the lender gets tired of your deadbeat behavior it will call out a third-party collection agency. The collection agency will report collection activity to the credit bureaus and again, seven years of bad luck.

3)   Charge Offs. If the lender gives up on your collection case, acknowledging you'll never pay the bill, it charges off the debt and puts your credit report on notice for seven years.

4)   Public Recordings. Bankruptcy, tax liens, judgments and the like are killers for your credit rating. Judgments are good (or, from your viewpoint, bad) for seven years, even if you pay them off. Bankruptcies can dog your credit report for 10 years and unpaid tax liens never go away.

5)   Settlements. If you pay a portion of a debt to your lender in a settlement, like some of the mortgage in a short sale, you can get a settlement notice on your credit report for seven years. Credit cards and other debts, likewise can be settled, with negative impact to your credit report.  They don't tell you this on all of those commercials on TV offering to help reduce your debt! 

6)   Foreclosures. If you can't or won't pay your mortgage the lender will eventually foreclose and relieve you of your home. Another seven year negative notification will drag down your score. The same applies when you give the home to the lender in a deed-in-lieu of foreclosure.

7)   Repossession – When you don't pay your vehicle loan,s a bounty hunter will be coming your way. He or she is not coming after you, but your vehicle, and that's often without notice. It's all legal.