Mortgage Modification Programs and Your Credit Score

Mother and daughter hugging in new house
Dear Experian,

I am beginning a government-sponsored HAMP mortgage modification program. My lowered first three trial mortgage payments will be reported as "partial payments." After the trial period they will be reported as "modified." How bad will this affect my credit score?


Dear DCN,

Loan modification programs are designed to assist homeowners by enabling them to keep their homes in situations where they might not otherwise be able to. How your loan modification program will affect your credit history and credit scores depends on how your lender plans to report the information.

Some programs, like the Home Affordable Modification Program (HAMP), may have little or no effect on credit scores. Talk to your lender and inquire whether the payments will continue to be reported as on time and current while you are making partial payments. If so, there may not be any negative impact.

However, if the lender adds a statement to the account to indicate that you are paying under a partial payment agreement, this could be viewed negatively by lenders and businesses viewing your credit report.

The important thing is to be sure you understand the terms and conditions of the agreement with your lender before deciding to enter into any program.

Thanks for asking.
The "Ask Experian" team

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