How will loan modification affect my credit score and/or history?
A home loan modification can help you stop foreclosure and stay in your home. But if you’re like most homeowners, you’re probably wondering how it will affect your credit, and whether in a good or bad way. Unfortunately, there is no single answer—it all depends on how far behind you are and the kind of mortgage loan modification you’ll be granted. Best-case scenarios Technically, since you’re not borrowing any money, a home loan modification won’t hurt your credit score. If you’re paying less in interest, you have a smaller debt burden. And since most lenders prefer an interest rate reduction, a mortgage loan modification can potentially improve your credit score. The implications are even better if your lender forgives part of the principal, although this is less common. If they write off $50,000 from your loan amount, it will show up on your report as a smaller loan, which can increase your credit score. The lender factor Unfortunately, the best case scenario is not always a possibil
