Question by One Still Man: How much lowerr with the Hamp Program lower my credit rating?
My wife and I have excellent credit! My wife applied for the Obama Hamp program since I am out of work. We just found out it might lower our credit rating. I wish she knew about this sooner. How much will this Obama Hamp program hurt our credit rating? Is there an institution I can find this real number from?
Thanks
Best answer:
Answer by bdancer222
I’m not sure if or how much the program would impact your score. It could be a temporary ding, here online like a debt management program. It’s noted while in the program but on completion the notation is removed.
It may also depend on exactly whay kind of loan modification you are doing. Some of the programs may ding your credit while others won’t.
In any case, shop if you are currently out of work and are in need of loan modification for your mortgage, you really aren’t going to be looking for and new lines of credit. Losing a few points on your score won’t make a lot of difference. Certainly won’t ding your credit as bad as a foreclosure would.
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Generally a loan modification does not have a significant impact (may be none at all) on your credit score except in the following cases.
Any principle reduction or missed or late payments will likely affect your credit score.
http://www.mortgagemag.com/news/2009/0401/1000010341070.htm
http://ezinearticles.com/?Does-Loan-Modification-Affect-Your-Credit-Score-in-Negative-Ways?&id=2207074
http://www.creditloan.com/blog/financial-implications-of-mortgage-loan-modification/
However, some lenders will not negotiate a loan modification unless the homeowner misses payments forcing derogatory entries on their credit report.
Typically a loan modification is an interest rate reduction similar to a refinancing.