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Asking for loan pulls down credit score

By Sally Maison
Published: Saturday, April 24th, 2010

AGERM-00305749-001Less credit scores are affecting house owners who signed up for program of mortgage assistance by the government.

For those people, who pay on time and yet are almost at default, are hit with the shock that their credit scores can come down by 100 points because of the modification of loan program by Obama administration. Making it harder to get a loan only makes getting a job even harder.

Eileen Anderson, a sr. vice-president of a housing counseling group in long island put forward a question asked why the credit scores of people were affected even though they tried to do the right thing.

The homeowners admitted that they are disappointed because all they wanted was a little help with loans but after they found out that they were brought down in credit scores, they were furious. They felt like they were cheated said Kathy Penley, a housing counselor.

This leaves is smaller impact than a foreclosure, where people actually find out after years that they have a patch of credit scores left due to missed payments or late payment records. And with this program they lose another 150 points, when measured on a scale of 300 to 850.

This $75 billion program quotes make your home affordable. The applicants of this program are first put on a trial program. Much to their astonishment, the applicants now know that their credit scores are brought down in this trial phase itself.

This program makes it harder for the people who find it hard enough to get a loan. The lenders need to know that people are going to them because they are in a financial crisis calling for help and not to be taken for a ride.

It is known now that the Obama program which launched last year have still kept thousand of people waiting and that only 170000 owners were done with their process by February. This program has produced sad results and other problems, credit scores being just one of them.

“The best way to build credit back is to continue to pay bills as agreed, to use credit wisely,” says Tom Quinn, vice president of scoring solutions at Fair Isaac Corp “As time goes on, the score gradually increases.” he brought about a good change called FICO scores.

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