Will my credit score be affected during the loss mitigation process?

During the loss mitigation process, a borrower’s credit score may be impacted depending on the specific actions taken and the terms of the loss mitigation options being considered. Generally, when a borrower enters into a loss mitigation plan, such as a loan modification or a forbearance agreement, the lender may report the account status differently than it would for a typical payment history. This reporting can have the potential to affect the credit score. For example, if a borrower is behind on payments before applying for loss mitigation, those late payments may already have influenced their credit score. Additionally, certain types of loss mitigation, such as a short sale or deed in lieu of foreclosure, could have a more significant impact on a borrower’s credit score compared to other options. It is important for borrowers to understand the implications of the loss mitigation process on their credit report. For the most current information on credit reporting and loss mitigation options, it may be helpful to visit the official Washington Mutual website.