Do Timeshares Affect Your Credit?
A timeshare can undoubtedly be a factor that affects your credit. While timeshares allow you to own a portion of a property to use for vacation purposes, most of the firms that finance them inform credit bureaus of your payment history. If you fall behind on your maintenance or loan payments, it can have a severe impact on your credit score.
How Can Timeshares Affect Your Credit Score?
So what will happen if you stop paying your timeshare? Let’s take a look at two different scenarios:
1. Timeshare Foreclosure
Timeshare foreclosures will most likely be offered for sale to the highest bidder at auction or deposited back into inventory to be resold. In this case, your credit score will surely take a nosedive, even if you do succeed at cutting ties with the timeshare.
A timeshare foreclosure will become a public record that could wind up in your credit file and lead to a significant drop in your credit score. Even if the resort developer does not report the timeshare foreclosure to a credit bureau, reporting agencies can easily dig up your foreclosure and tack it on to your credit history.
2. Late Payments
Foreclosure is not always the result of timeshare payment issues, as some late payments will merely result in fees. These penalties will also impact your credit score in many ways.
For example, just one missed timeshare maintenance fee may cause the resort to report you to collections. You may receive mail and phone calls demanding payment, as well as the accumulation of negative entries on your credit report. These entries can cause real damage if they’re not resolved quickly and will remain on your report for at least seven years.
In extreme cases, the court has the right to file a bank levy on your accounts and garnish your wages. As long as you do not stay up-to-date with timeshare maintenance fees, you will not be able to access the resort’s rental program or use your annual weeks.
Do Timeshares Show Up on Credit Reports?
Timeshare foreclosures can certainly appear on your credit reports. The most common type of credit scores — FICO credit scores — have a 300 to 850 range. A timeshare foreclosure can drop your FICO credit score at least 100 points and even more in some cases.
Drops in credit scores can vary from one borrower to the next, and the dips are more dramatic if your credit score prior to the foreclosure action was high.
How Long Does a Timeshare Foreclosure Stay on Your Credit?
A timeshare foreclosure can significantly impact your ability to obtain another mortgage for up to seven years.
You may face high interest rates or future loan denials if you apply for other forms of credit, like a credit card or a car loan.
How to Prevent Timeshare Foreclosure
When you want to prevent timeshare foreclosure, walking away can be tempting. Unfortunately, releasing a vacation property or timeshare isn’t as easy as letting the resort know about your decision to terminate.
That’s where EZ Exit Now comes in. We specialize in implementing timeshare exit strategies tailored to your specific needs. Partnering with us can help get rid of your timeshare and potentially prevent timeshare foreclosure.
As a faith-based timeshare cancellation company that’s passionate about giving back to the community, EZ Exit Now may be able to guide you through the timeshare exit process. Our esteemed affiliates list includes highly respected organizations such as the U.S. Chamber of Commerce, the Texas Association of Business, Christians in Business and the Better Business Bureau. We proudly employ veterans of the U.S. Armed Forces and encourage our team to volunteer in their local communities.
Our caring staff will meet with you one-on-one wherever you feel comfortable and discover whether we can help you. This first meeting will allow us to learn all the details about your current circumstances and timeshare property.
If we are indeed able to help, our team will gather all the necessary information, draw up all the required paperwork and find a solution. Once you are a client, you can count on EZ Exit Now to get you out of your timeshare as quickly as possible.