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Credit Damage

what is more damaging to your credit report credit card lates or a foreclosure?


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  • # Posted 6 months ago
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David Reed
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David Reed is WalletPop's Mortgage Expert 

Foreclosure. Big time.
Posted 6 months ago ( permalink )
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Thank you for answering. I keep hearing that credit cards are more damaging. Who can I verify this with for good? I am in a bad situation as half the rest of the US and it's a question of paying credit or paying my mortgage. It's like playing roulette every month with the bills. We're trying to figure out if it's more worth it to let the credit go or walk away from the house.
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David Reed
179 answers
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David Reed is WalletPop's Mortgage Expert 

You can verify it with me.  I'll put it to you this way, a lender will still make a mortgage to you with credit card late payments showing up on a credit report, sometimes even outstanding collection accounts don't have to be paid.

But a lender won't make a mortgage loan to you for five years after a foreclosure has taken place and then only with reestablished credit.
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Wenger6
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Foreclosure for sure  will hurt your credit more!  ALWAYS make your house payment first!  Credit card late payments are not good either.  I suggest you get in touch with a credit counseling company and let them help you work out a payment plan with your credit card companies.  Sometimes you can contact the credit card companies direct and they will put you on a payment plan (of course, they will not allow you to charge any more until you are paid current), but it will allow you to be able to make all of your payments and ON TIME!  Which is the goal - right?  QUIT USING THE CREDIT CARDS - you will only get in deeper.
Posted 6 months ago ( permalink )
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I totally agree, my husband and i feel the same way. Sometimes we ask ourselves if its worth not paying all of our other bills just to make the mortgage payment. We are seriously considering walking away from our home and go find somewhere cheaper to live so as to save $$
Posted 6 months ago ( permalink )
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That's where we are, we just discovered our home is worth literally half of what we bought it for just 11 months ago. It's our first home and we were told stop renting and buy. Well now it makes more sense to walk away and rent. Certainly puts a huge downer on it.

Realtors are telling us people are staying in their homes for a year without paying a dime and then just walking away and the banks are still forgiving part if not all of the debt. It costs the bank more to foreclose now than if they just let you give it back to them. None of it makes any sense anymore.

We're checking all our options and getting an appraisal. Hopefully we'll make a decision soon so we can move on with our lives.
Posted 6 months ago ( permalink )