I have had quite a few homeowners ask me if they do a Loan Modification how and will it show or affect their fico. Well after doing some research here is my answer.
FICO credit scores are calculated from information in consumer credit reports. How or if a loan mod affects a person's fico score really depends on the mortgage company and how they choose to report the event to the credit burear, as well as the individual's overall credit profile. It also depends on how far behind in payments the person is as well, if they are 3 or more months behind in their mortgage you can bet that the mortgage lates will be on that credit report and damaging their score. Sometimes in a successful loan modification I have seen mortgage lenders agree to remove the lates from the homeowners credit report which is a huge help to somone with a 620 credit score get back to 650 or 700. So it isn't so much the loan modification that affects the FICO score it is the late payments. And as I said, I have seen lenders agree to remove the lates from credit reports, but not all and not all the time for every loan modification.
Comments(2)