Credit repair after a loan modification

[Sarah]

After almost two years I’ve finally succeeded in getting better terms on my mortgage. While it’s a small price to pay for the incredible amount of money I’ve managed to save, my credit was knocked down almost 90 points. How can I get my credit fixed and restored to where it was prior to the loan modification?

[Tracy Winters]

There’s no instant fix

Usually what happens after loan modification is that a Partial Payment Arrangement Made status appears up on your credit report. Unfortunately, Partial Payment Arrangements are considered a negative by the FICO formula, which is why your credit score was adversely affected.

There’s no instant fix for this. The only thing you CAN do is re-build your credit by making timely payments and avoiding any other negatives. You’ll need at least 24 months of consistent, on time payment history to improve your score and get it back to where it was.

More about mortgage modifications here.

[Author]

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