Homeowner associations can be great for neighborhood maintenance, enforcing community guidelines, and sometimes if necessary, to settle disputes. However, all of these benefits come with a cost, the association dues. For years, these HOA dues have not been reported to the credit bureau, this is all about to change in October.
Credit data reporter Sperlonga has agreed to become the first company to furnish HOA payment and account status data to Equifax, which is one of the major credit reporting agencies. They believe that introducing new sources of data beyond what has traditionally been found on credit files will provide additional insight into a consumer’s financial behavior.
This is not a new concept, for many years experts in the credit reporting industry have urged to have financials such as HOA fees, rent and utility payments to be added to credit scores, as a way of giving more access to credit. “Until now, HOA payments have gone largely unreported to the national credit reporting agencies. 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,” said Matt Martin, chairman and founder of Sperlonga.
So do not forget, starting in October property owners who are late or delinquent with HOA payments could likewise see a negative impact on their credit scores, just as they would with a late mortgage payment. Hopefully this encourages people to be up to date on their HOA payments since nearly 25% of Americans have to pay them, according to RealtorMag.org. If people are able to make routine payments and keep track of their HOA fees, than this coming into effect should have a positive outcome in helping many increase their credit scores.