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VantageScore survey shows loan modification beneficial
10/01/2010
Loan modification and refinancing may be the only option for homeowners attempting to hold onto their property, but many fear that this will hurt their credit scores. However, a recent survey conducted by VantageScore found that out of 400,000 anonymous consumer credit files, home loan modification had little effect on scores.
During the second quarter, the number of homeowners who were at least 60 days late on their mortgage payments rose 6.6 percent, according to Fox Business. Experts believe that understanding the factors that go into a credit score can help more Americans see the advantages of loan modification.
Foreclosures, on the other hand, can hurt a payment history. Bankruptcy and foreclosure have the potential to knock hundreds of points off of a credit score. Homeowners may opt for consolidation or debt counseling if they choose to pass on loan modification.
The federal government's Home Affordable Modification Program has already helped nearly 1.2 million Americans, according to statistics recorded in July by the U.S. Treasury Department and U.S. Department of Housing and Urban Developement.
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