Homeowner associations can have many benefits, like maintenance and enforcement of neighborhood guidelines. However, they also come at a cost. Soon, these costs may affect you even further: late homeowner association fees may soon affect your credit score. Currently, payments like mortgage and and insurance costs are parts of what contribute to homeowners’ credit scores.
According to credit.com, Sperlonga, a credit data aggregator, is the first company providing information about homeowner association fees. They will give this payment and account status to Equifax. Equifax is one of three major credit reporting agencies. These reports are set to begin in October.
“Until now, HOA payments have gone largely unreported to the national credit-reporting agencies,” says Matt Martin, chairman and founder of Sperlonga. “Our service will help elevate association payments to the same level of importance as the consumer’s other financial obligations like residential mortgages, auto loans and credit card payments. Property owners that pay HOA fees on time should begin to see the similar impact [on] their credit reports as they would with other payment obligations traditionally found in a credit report.”
Late homeowner association fees would bring down homeowner credit scores. However, those who pay on time and responsibly will be better off. New criteria for credit scores can give more people access to credit.
“Introducing new sources of data beyond what has traditionally been found on credit files can provide additional insight into a consumer’s financial behavior and help deliver expanded credit access,” says Mike Gardner, senior vice president at Equifax.
This greater access to credit could help homeowners if they move again and need to take out a loan. While this may put more pressure on to pay those homeowner association bills, the effects should be worth it. At RE/MAX Paradise, we are happy to help you discuss financing a home to get you closer to buying your dream home in Miami.