Saturday, May 22, 2010

Revised loan should not hurt FICO

by Dave Cherry Call 12 for Action May. 17, 2010 12:00 AM

Question: I'm getting a mortgage modification strictly to get a lower payment.

I have great credit and have never missed a payment. How will this loan modification affect my credit score?

- Camilla P.

Answer: I spoke with Fair Issac, the company that calculates the most widely used credit score used by lenders.

They say if the loan modification is administered through the government-qualified Home Affordable Modification Program, your score should not be affected at all.

But if the lender reports the modification as a partial payment, this could be considered a serious delinquency and your score could take a hit of up to 20 percent. Consumers like you, with higher scores, would lose more points than those with lower scores.

You should work closely with your lender to ensure that it does not report your HAMP loan modification as a partial payment.

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Revised loan should not hurt FICO

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