Every person's credit score is based on their entire history of using credit (well, 7 years of it, anyway), and the entire picture will be considered in assigning a score. If a homeowner has a lot of other bills that they are current on, and loans that are paid off or on time, the foreclosure may not have a huge impact. It may only cause a slight drop in the overall score because one negative mark is covered up by numerous positives. Combined with numerous late payments on other loans, though, a foreclosure can really help bring down these foreclosure victims' scores. This is why it's so important for homeowners to do what they can to stay ahead on all of their bills while in foreclosure, in order to preserve their long-term credit history as much as they possibly can.
Same thing applies with how much credit the homeowners in foreclosure have overall. If the mortgage is their only bill right now and they begin to default on the payments, they can expect a big drop in their credit score. But if they have other student loans, car loans, credit cards, etc. that they are paying as well, a foreclosure is just one negative mark on an overall positive credit report. Still a negative mark, of course, but not as bad as it could be. Again, the overall picture is more important than just one part or another. But if the entire picture is just the mortgage payment and it is behind or in foreclosure, then that will carry much more weight.
The vast number of homeowners in foreclosure are concerned with maintaining their credit-worthiness and preserving a good score. They often want to be able to borrow money again in the future at a low interest rate, whether it be to purchase a new house, replace an old car, or simply consume more goods and services. For many of them, a foreclosure is simply an unavoidable consequence of a financial hardship, and being able to borrow more indicates an ability to survive the next hardship for a longer period of time. But for others, the experience causes them to reconsider their use of credit and begins a desire to become independent of borrowing money. For these foreclosure victims, having bad credit will prevent them from living outside of their means, and it will provide them with an escape from the credit trap that so many consumers fall into.
Foreclosure situations often end up in a depressing, out of control whirlwind of unpaid bills, collection calls, lawsuits, or worse. Many homeowners desperately attempt to get back in good graces with their creditors, while others realize the uncaring system for what it is: a finely laid trap that offers riches for nothing but, used unwisely (as it is designed to be used), makes slaves out of debtors for their entire lives. Thirty or forty year mortgages, credit cards with payment plans that last hundreds of years if only the minimum is paid, and the increasing use of lawsuits to pursue defaulted loans to the very end all result in consumers playing a very dangerous game. Homeowners in foreclosure should very carefully take into consideration the uses of credit in their lives and if the payoff is worth it to them.