Late HOA payments may soon affect credit scores
NEW YORK – May 10, 2016 – A major credit reporting agency says it will soon take into account homeowner association fees. Homeowners who are late on payments may see it affect their credit score.
Sperlonga, a credit data aggregator, is the first company to provide homeowner association (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.
“Until now, HOA payments have gone largely unreported to the national credit-reporting agencies,” says Matt Martin, chairman and founder of Sperlonga. “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. Property owners that pay HOA fees on time should begin to see the similar impact [on] their credit reports as they would with other payment obligations traditionally found in a credit report.”
Property owners who are late or delinquent on HOA payments 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.
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