Foreclosure Was Dismissed - Does It Still Hurt My Credit Score?

Reader Question: A couple of years ago I had a foreclosure action filed against me. I was able to pay the bank and the action dismissed. Does this still count as a foreclosure on my credit score?

If you haven't done so already, you should get copies of your credit reports and review them. When you have any type of legal judgment filed against you (a foreclosure in this case), it will show up in the "Public Records" section of your credit report.

When a bank forecloses on a homeowner, they will initiate the process through the courts. But that's not when it goes on your credit report. The legal filing has nothing to do with the credit reporting companies (TransUnion, Equifax and Experian). The bank must report the foreclosure to these three companies. How and when they do it will vary from one lender to another.

So the first thing you need to determine is whether or not the foreclosure was reported to the credit reporting companies. If it was, it will probably still show up under the "Public Records" section of your credit reports. If you find that it's still listed there, you can dispute it with the credit bureaus. Use whatever supporting documentation you have to prove that you paid the bank back, and that they dismissed the foreclosure action.

Your credit score is based entirely on the information contained within your credit report. So if the foreclosure is showing up, it's also hurting your scores. Get copies of all three reports and make sure they are accurate. If they're not, dispute the inaccuracies through the reporting agency that produced the erroneous report (this might mean one of them, two of them, or even all three bureaus).