This is one of the most discussed issues in consumer credit, mortgages and trying to mitigate losses. The short answer is yes and no. But I think you want to hear a better explanation. According to some advocates of consumer loan modifications do not adversely affect your credit score. Sure, they put an asterisk next to their demands, because they do not really know. Other reports indicate that many of the major banks and mortgage services using special codesShow that a customer will pay a modified payment.
I recently spoke with a representative of Equifax. She would not reveal his name for privacy reasons, but said that some of the big banks are using a special code "AC". Even with my extensive knowledge of credit information, they had based on my memory, what is an upgrade to "AC". Experience has shown in the code "AC" that a borrower is just as partial payment for their debts. The result would be a dramatic credit scorereduced. In this light, many creditors reduce your credit line available.
Another interesting thing is that if you ask 99% of the creditors, who say they never had a payment "partial". Many of my clients have tried half or less than a full mortgage payment. In all these cases, the lender turned and sent to UN-collected on the client. They have received a letter also informed that their payment was not accepted because theBank does not accept payment "partial".
I pressed the Equifax employee for a better explanation. If a creditor does not participate in the repayment of the loan because it allows them to report that the consumer will make only partial payments? Needless to say, I think she was surprised by my question. After a few moments of silence, said: "Well, we do not say (the credit reporting agencies), creditors, how or what to report." In essence, the creditor can report whatever they wantthree credit bureaus.
With this information, let us discuss how this impacts.
If you are on a loan in process and not a late payment in the last 12 months, the code "AC" to do some damage to your credit scores.
For current customers with strong credit scores, my advice is for a serious look if you and / or need a loan modification company. They are comfortable making your mortgage payment and you just want a lower rateand payment, you will need to assess the advantages and disadvantages. Perhaps it is not that a hit on your credit card, so you have to do without having to request and receive a loan modification offer. If your finances are really tight and squeezed every penny from the budget to make your mortgage payment, you may want to suck him only to accept the change and the negative impact of the loan.
Remember, time heals all wounds. So if your credit scores drop by a change calculatorYou can save a great story on this by paying a relatively long period. Payments on time and in any event, the greater impact on your credit scores.
If you are a customer who were behind on your mortgage and / or late payment of 30 days within the last twelve months, the "AC" is the code does not affect your credit score. The credit has a dramatic impact, so that each additional drop is caused by this type of credit information is not takenhave too much influence.
For these consumers, we obviously need some kind of education loans. My advice is that you and your business, get a loan modification. Then you pay the new mortgage payment change in time. Once this is done for at least twelve months, your credit score to increase and overcome any negative coverage from your lender / servicer.
As with all matters, things are not simply black and white. Gray seems to govern the day and go all the customers must alwaysfinancial transactions with eyes wide open.
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