Credit report questions

[Michael Diggle]

Hi everyone so not sure if this is right place to ask this but does anyone know how credit scores work? I had purchased a property 10 years ago, walked away from it in 2007 after losing job and at that time bank not working with me, I was young and just gave up, I'm in process today of getting a mod done but wanted to know if the loan would age off credit report since I haven't paid anything on it in years, it has still not foreclosed which is why I'm trying to get a mod done, waiting for offer to see if it works for me to turn it into a rental property. Or should I just forget about it and let it age off report. Or is that not even a thing lol just wondering Thanks

[Kerry Baird]

It has already aged off your credit. You are getting ready to stir the pot, imho.

Here's a post from credit specialists, Experian:

Loan Modification and Credit Scores
February 15, 2012by The Experian Team
Dear Experian,
How will a loan modification affect my credit scores? I’ve never been late on my payments and have been approved for a modification without any late payments.
– HBO

Dear HBO,
You are wise to question the impact of a “loan modification” on your credit history and credit scores. The answer is that it depends on the “modification” program.

Loan modification through government programs, such as the Home Affordable Modification Program (HAMP), may have no impact at all. Such programs include loan reporting requirements that result in the mortgage continuing to be reported as current and paid in full, if the requirements of the program are met by the homeowner.

Such programs are intended for people struggling with serious debt problems. In order to qualify, you may already have to have serious debt repayment difficulties. If so, you shouldn’t be concerned about your credit scores because they are already probably poor and you aren’t in a financial position to take on new debt.

Other programs may be referred to as “loan modification” but could hurt your credit scores because they are actually debt settlement.

Intentionally allowing a mortgage or any debt to become delinquent will result in the account payments being shown as late in your credit history, and your credit scores will suffer. If you negotiate a lower interest rate or reduced repayment, the account might also be reported as “settled” or “paid for less than originally agreed,” which also will hurt your credit scores.

Before entering into a “loan modification” be certain to carefully review the contract terms and understand how your payment history will be reported. Anything other than paid on time and in full will have a negative impact.

Thanks for asking.
– The “Ask Experian” team