Sometimes when money is tight, a homeowner might have to make a decision which bills are urgent and which might be able to be put off. A thought that might cross one's mind, is to delay paying the HOA fees, thinking that they won't affect credit scores. Well, that may be soon to change.
Sperlonga, a credit data aggregator, is the first company to provide HOA payment and account status data to Equifax, which is one of the three major credit-reporting agencies. A full rollout of the new HOA reporting to Equifax will go live in October.
Homeowner associations and property management companies collect about $70 billion in HOA payments yearly among at least 333,000 community associations, according to the Community Association Institute.
For property owners who are late or delinquent on their HOA payments, they will likely see a negative effect on their credit score, just as if they had missed a mortgage payment.
“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.
Source: NAR, Sperlonga and “Your HOA Payments May Now Affect Your Credit Score,” Credit.com (May 4, 2016)
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