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Does a Loan Modification Hurt Your Credit?

Author: William Jimenez | Date Posted: 04/14/2009

Does a loan modification hurt your credit?  This is a great question because whenever you are doing a loan modification, typically your credit score is being hurt by the past due amounts of your home loan.  So in essence, the actual loan modification process does not affect your credit but the act of falling behind does.

Now, if you are wondering how does a loan modification affect your credit history.  Again the answer in No. It does not affect your credit history.  You see, your credit score will actually be helped if you are in arrears.  The loan modification process is designed to change the terms of your loan so that you can continue to live in your home.

Are you starting the process?  Then don't worry about affecting your credit score, because the loan modification does not affect your credit history.  But, you have 2 options.. Do it yourself, or find a company to do it for you. 

Now, the negative effect from a loan modification process is that the banks will normally put you on the back burner if you are not late.  Now, you may say, " I don't want to affect my credit by not paying my mortgage".  Well, that is why you need to work hard to keep your credit by calling them everyday to give you the time of day.

Sad but true, when the loan is past due, it gives the bank a bigger reason to ensure the home doesn't go to default.  Now, don't get me wrong, continue to pay your mortgage.  You just have to follow up like never before.  This is how you can keep your credit from being damaged.










If you are looking for homes for sale in , you can search the multiple listing service ( MLS).


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does a loan modification hurt your credit, do loan modifications affect your credit

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