Loan modification credit damage
Loan modification’s are great when they are used correctly. They can help the homeowner save their home and the bank does not have to lose money foreclosing on a home. But the process is not easy as everyone who has gone through a loan modification knows and there can be lasting credit damage resulting from a loan modification.
Loan modifications are definitely not good for your credit rating/ fico score. Your credit rating means everything in terms of financing, it can determine how much money you can borrow and at what rate for just about anything, a car, a house, a business loan…
The exact damage a loan modification does on your credit score is still relatively unknown, to tell you the truth, it all depends on your particular situation. However I do know one thing, a foreclosure or bankruptcy is not any better for your credit rating, in fact it is much worse. If you are behind on your mortgage a loan modification is your only real option if you are looking for a happy ending.