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Will Your Credit be Damaged if You Miss a Payment?

When you missed a payment of your mortgage, repercussions occur and the degree depends on the number of payments you failed to make. For sure, it creates damage in your credit report, thereby, dropping your credit score. But there is more to it. The more missed payments you have done, the higher the points that your credit score is lowered. Consistent payment should be your priority. Set aside a payment immediately with your budget. The longer you remain delinquent, the more that you cannot pay and the higher the possibility that your mortgaged property be foreclosed. Hence, it is vital that you should never be delayed in paying your credit.

Should the delayed payment cannot be really avoided no matter how much you tried, you need to ascertain that you are not behind for 90 days because this is the ripe time for the lender to commence the foreclosure of your property unless you have the money to pay in full, including any fees required by the lender, to avoid it. However, when you are beset with this critical situation, do not lose hope because there are organizations that cater to homeowners to address their arrears in this situation that is similar as yours.

However, when a loan payment default happens for the first time that tarnishes your credit history, the damage is not that much because you were able to maintain a good credit record in the past except for this. And there must be a good explanation for missing it out. It may just be a temporary situation nevertheless, what is relevant is to be able to provide an evidence of the circumstance that befell you to support your claim of a short-lived credit difficulty. It often leads to a big possibility of being able to get a mortgage despite this once in a lifetime payment default.

If you are a borrower whose non-payment has been habitual from utilities to banks then your rating really goes up and up for your bad credit score and there might be no options available for you. Unless you can satisfy the lenders' requirements of having mitigating factors to make your credit score passable for a mortgage. One of these factors is having savings or equity placed at 20 - 40%. The other one is having a stable income that can guarantee consistent payment. Another factor to look into is the borrower's reason for skipping payment which should really be reasonable and justifiable to rationalize the approval of a mortgage. A clean credit history for the last 3 years or more is most likely to be qualified for mortgage. It also helps if the borrower has a co-maker with a faultless credit record. With these mitigating factors at your side, definitely the lender can qualify you and grant you the loan needed because the momentary payment default that stained your credit record was made justifiable by you.

The damage brought by unpaid repayment of loan depends on two factors - the type of credit and the number of times payment has not been made. The most critical of these credits is the home loan as explained earlier. It is very crucial on the part of the borrower not to miss any payment at all. The borrower can come up with various ways and means to allocate a separate budget for a loan payment. Expenses can be minimized and prioritized at the same time. Additional income can be sourced out too. This is far more important than missing a mortgage payment because of the negative effect it can give to your credit report that consequently lowers our credit score. It is more expensive and the stakes are high when payment is missed and it is better to sacrifice some items among your needs and wants rather that accumulating your loan default which originally started from one.

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