Foreclosure and Credit Reports

Across the country, communities are in the midst of an unprecedented wave of foreclosures. 9 million homes are expected to face foreclosure between 2009 and 2012.

A foreclosure can cause a drop of up to 280 points in an individual's credit score, easily enough to cost them a loan, a job, an apartment or a good insurance rate.  A foreclosure typically stays on an individual's credit report for 7 years.

A recent report shows that in 2005-2006, African American and Latino home loan borrowers were at least twice as likely as White home loan borrowers to receive a high-cost loan. For this reason, foreclosures have been concentrated in African American and Latino communities, and will have a disproportionate impact on their credit reports.

At a time when we need to be creating jobs and rebuilding our economy, credit reports in employment should not be used to further disadvantage the many families that have gone through a foreclosure.

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