HOA Payments Will Soon Affect Credit Scores
HOA’s may soon have more leverage to collect assessments from chronically late paying and delinquent homeowners. Call it an “incentive”. Sperlonga, a credit data aggregator, will become the first company to furnish HOA payment and account status data to Equifax. A test run will begin in August with full reporting planned for October. Once Equifax receives the data (perhaps the other reporting agencies will join at a later date), homeowners’ credit scores will be affected in the same manner as mortgages affect credit scores. On-time payments will have a positive impact on credit scores, while late and delinquent payments will have a negative impact on scores.
Until now, HOA payments have not been reported. Matt Martin, chairman of Sperlonga said in a prepared statement that the new service “will help elevate Association payments to the same level of importance as the consumer’s other financial obligations”. Associations might see this as good news as owners will have more incentive to make timely payments of their maintenance obligations.
However, critics argue that assessments are not the same as mortgages or other loans as associations do not provide financing for purchased goods. They provide maintenance and service only.
Florida, obviously, has thousands of HOAs and condo associations. Over the next few months, associations boards should be in touch with their property managers to determine the cost of reporting to Sperlonga and the overall benefits to the association.