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Late HOA payments to affect credit score

According to a major credit reporting agency, it will soon take into account homeowners association fees. Homeowners that are late on payments may see it affect their credit score.

Sperlonga, who is a credit data aggregator, will be the first company to provide homeowners association ( HOA ) payment and account status data to Equifax, which is one of the three major credit reporting agencies. A complete rollout of the new HOA reporting to Equifax will go live in October.

As per Community Association Institute, homeowners associations and property management companies collect approximately $ 70 Billion in HOA payments yearly among at least 333,000 community associations.

This type of service is meant to help elevate association payments to the same level of importance as the consumer`s other  financial obligations like residential mortgages, student loans, credit card payments and auto loans. Property owners that pay HOA fees on time should see the similar impact on their credit reports as they would with other payment obligations traditionally found in a credit report.

Property owners who are delinquent or  late on their HOA  payments will likely see a negative impact on their credit score as if they would have missed a mortgage payment.

According to a senior vice president of Equifax, Mike Gardner, introducing new sources of data, beyond what has traditionally been found on a credit file can provide additional insight into a consumer`s financial behavior and will help deliver expanded credit access.

Source: Sperlonga and “Your HOA Payments May Now Affect Your Credit Score,” Credit.com (May 4, 2016)

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