A column in the Boston Herald this weekend mentioned the scary scenario of how your credit score can get ruined – through no fault of your own. Credit cards and banks, in an effort to shore up their ledgers, may cut lines of credit to customers with no notice (or any explanation). The result? Homeowners and others that have good financial histories can suddenly find their credit scores (FICO) lowered below acceptable limits for lending or refinancing.
The National Association of Realtors is lobbying FICO (Fair Isaac Corp.) hard to have the credit line crunch issue addressed. FICO’s comments, as reported in the article, don’t sound like they’re willing to change much. NAR is also trying to get the rules changed on how FICO records loan modifications under government programs (such as the Obama administration’s HAMP program). Apparently government-approved modifications are showing up on credit records as mortgages “not paid as originally agreed.” (!!)
