How will a loan modification affect my credit score?

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How will a loan modification affect my credit score.

How will a loan modification affect my credit score ? It comes back to how is the account being paid when the modification is completed. If the account is currently past due and a principal reduction is made. then the reduction will not substantially help or hurt the score. What will hurt the score is the history of slow payments (if any) that preceded that reduction. Once the loan modification is made and the borrower is making on-time payments (on this and hopefully all other accounts) If a year or two go by than the borrower’s credit score should recover. Although, the bad history on the account will always hurt an individual’s score to a degree. Once an account falls into a “Was 30 / Was 60 / Was 90 it will always be tainted with that classification. (Was 30 / Was 60 / Was 90 is an insider term that indicates the account was delinquent but is now current)

If you’re looking for other ways to improve your credit score please go to GetLoanReady.com you can get free videos and worksheets to increase your credit score from a more holistic perspective. Never Pay Collections

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If you want to see more videos about credit and credit scoring check these out at www.thecreditguy.tv. If  you are a mortgage lender please share this on your Facebook or LinkedIn page.   If you have any questions, leave them down below I’d be happy to answer them.

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Go to www.getloanready.com to find other ways to improve your credit score. I’m Dave Sullivan here for the credit guy TV so you with a little bit me we’re going to change the credit industry thank you

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How will a loan modification affect my credit score
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