 TITLE: Does a Mortgage Hurt Your Credit? CONTENT: There is, of course, the other side to the story. If you have trouble repaying your mortgage on time, your credit score will almost certainly suffer. Although it's always a good idea to make your mortgage payment on or before the due date, the real trouble for your credit begins about a month after you miss a payment. Most mortgage lenders extend a grace period of 15 days before they'll penalize you with a late fee. If a payment is 30 days or more past due, they will report it as late to the credit reporting agencies.\nEven one 30-day late payment can have a lasting effect on your credit. Payment history accounts for 35% of your credit score and is the biggest factor in its calculation. A late payment will appear on your credit report for seven years, though its effect diminishes over time. An isolated 30-day late payment is less damaging than multiple late payments or one that extends to 60 or 90 days past due.\nAn unpaid mortgage that goes into foreclosure creates its own set of problems. In a foreclosure, multiple missed payments cause your mortgage to go into default. As part of your loan agreement, your lender has the right to seize your property and sell it to recover their money. The missed payments that lead up to foreclosure—120 days or four successive missed payments is typical—will seriously damage your credit. The foreclosure itself also becomes a negative item on your credit report. Worst of all, you lose your home and any financial stake you have in it.\nClearly, the best course of action is to avoid late payments and foreclosure. If you think you may be unable to make a loan payment at any time, contact your lender to see if anything can be done to minimize the damage and help you get back on track. END