Although many Americans are grateful for the president’s foreclosure rescue plan and they see it as a way out of their financial troubles not many realize this kind of modification can actually hurt their credit score.
A recently published CNN report states that the company received a flood of e-mails from people who were complaining that the trial loan modifications actually did damage to their credit scores.
The experts agree and say that showing that they are delinquent in the regular mortgage payments would hurt their credit scores anyway, and they also pointed to the fact that getting a trial modification should affect their credit scores because it shows that they cannot make the original payments as planned.
However, the CNN story also goes on to state that at least one major bank has made it their policy to inform people that their credit scores could be affected when they enter the government-sponsored program and loan modification. The severity of the penalization on your credit score is determined by the number of payments you missed before you entered the program.
Your credit score is the way that your financial health is measured and is generally used as a consideration after you’ve applied for a loan.