How does foreclosure affect credit in Hawaii? Hawaii is a beautiful place to live but foreclosure in Hawaii is just as common in other parts of the country. The landscape is gorgeous and the climate is perfect for many people to move to the island. However, a little known part of the state is how many people are losing their homes to foreclosure due to lack of jobs and a very tight credit system.
What is Foreclosure?
A foreclosure occurs when you cannot keep up with your monthly mortgage payments. The further you fall behind, the more likely it is that your lender will start the process of foreclosing on your home. If you are having financial problems, the worst thing you can do is ignore the situation and hope it gets better. As soon as possible, make an appointment at your bank or lender and explain the situation. The truth is, banks do not want the hassle of foreclosing on a property that they may not be able to sell. They would much rather make adjustments, if possible, to your mortgage and keep getting regular monthly payments.
Can We Recover From Foreclosure?
Most people believe that their credit scores will never rebound from a foreclosure in Hawaii, but that is not true. A foreclosure will stay on your credit report for seven years, but over the years, the importance of it will fade. Having a foreclosure on your credit report is definitely a negative impact, but in as little as two years, your score can start to increase.
To make sure your foreclosure has as little impact as possible, make sure all of your other debt is paid on time each month. If your foreclosure is the only negative thing on your report, it will have less impact than if you defaulted on payments regularly. Building positive credit reports is more important than ever after having a property foreclosed on.