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How does getting a Loan modification affects credit

Posted on: 09th Nov, 2009 04:53 pm
My sister is thinking of applying for a loan modification because she is a little strapped for cash, but on the form it said she will be reported to the credit card agency as being delinquent, which she has never been. Someone told her that the credit card companies will drop her. Is this true? She has not missed a payment but has to borrow sometime to make her mortgage payment and is barely making minimum payments on her credit cards. Your answer will be greatly appreciated.
Thank you.
Hi ijaggon,

If she has not defaulted on her loan payments, then the lender will not be able to report her mortgage dues as delinquent. In my opinion, before filling out the form, she should talk to the lender and check out the details of the program with him. He would let her know whether or not her credit would be affected if she goes for a loan modification.

Thanks
Posted on: 09th Nov, 2009 07:44 pm
No but it will be depend on credit card agency.
If your sister will be going to bank or financer officer and ask about loan modification,. they will be give good advice of loan modification.

By good luck... :lol:
Posted on: 10th Nov, 2009 02:33 am
If your sister has to borrow money to make her house payment (never a good thing) she should be focused on saving her home. Whether or not her credit card companies dump her should be secondary.
Most mortgage companies report a loan modification as settled, which doesn't show up as a delinquency unless she has had late payments.
Credit card companies are looking closer at other credit lines and may reduce her available credit or cancel the card if she has delinquencies but if she can save her home in the process she still comes out a winner.
Good Luck!
Posted on: 10th Nov, 2009 08:17 am
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