If you happened to just arrive on Planet Earth from a galaxy far, far away, you may think that a credit report is a list of all the wise and generous things that the karma gods are giving you credit for. But the rest of us know that a credit report outlines your financial history, with an unfortunate focus on the negative items. Not only do the three major credit reporting agencies seem to pick up every payment you've made a day late, but the negative items, like foreclosures, seem to sprout roots in your credit report and live there, on and on, for years.

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The three big, nationwide credit reporting agencies, Experian, Equifax and TransUnion, collect your credit history. Lenders report your credit cards, loans, utilities and other financial affairs you undertake, and the credit reporting agencies prepare and maintain a report on your credit. They also issue you a credit score, called a FICO score that ranges from 300 (low end) to 850 (high end).

When you apply for a loan, one of the first things a potential lender looks at is your credit score. A bad credit score severely limits the types of loans you can get. Negative financial occurrences, like being late on a revolving debt payment or a bankruptcy, negatively affect your credit score.

A foreclosure is a far more serious financial upset than a late credit card payment. A foreclosure occurs when you have borrowed money and used your house or other real estate for security, then failed to make payments on the debt. The bank or lender has the right to foreclose, and can sell your property to collect the money due.

A foreclosure is definitely a black mark on your credit history, making it less likely that other lenders will risk loaning you money. Foreclosures drop your credit score significantly, at least by 100 points and sometimes more, and they remain on your credit report for a full seven years.

Any type of foreclosure is an indication that you were not financially able to meet your legal debts. Whatever one thinks of timeshares as an investment, a lender will see a timeshare foreclosure as a major negative, although perhaps less so than a home foreclosure. Your credit score may drop significantly. The timeshare foreclosure is part of the public record and will appear on your credit report for seven years.

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