How does a loan modification or forbearance plan affect my credit?
• If you enter into a loan modification review or forbearance plan (payment plan) with your lender mortgage servicer or bank, your credit score will be impacted and other debtors will find out as well. Some debtors (credit card companies) may reduce your available credit or may decide to close out your credit card/s altogether. The credit card companies do this to make sure you don’t use that money to pay your mortgage and to protect their financial interest. As long as your arrears (past due balances) are not current, your mortgage servicer will report you to the credit bureau as being late/delinquent. I am being considered for a loan modification by my lender, and have been making all monthly payments in accordance to the original terms and conditions of my mortgage (Note), why is my credit being impacted and showing that I am not making any payments to the mortgage servicing company when I am? Some lenders even though you are making your payments on time as indicated on the “Note,”
