Watch out! HOA fees can now affect your credit score.
Homeowner’s associations (HOAs) offer community features and maintain community standards, usually for a fee. According to the Community Associations Institute, homeowner’s associations and property management companies collect about $70 billion in HOA payments yearly.
Until now, HOA payments have gone largely unreported to national credit-reporting agencies, which is good news if you’ve been habitually delinquent on your dues. However, beginning in October, Equifax will roll out a new program which includes HOA data.
Sperlonga, a credit data aggregator, is the first company to provide HOA payment and account status data to Equifax. This service will help elevate association payments to the same level of importance as other financial obligations like mortgage loans, auto loans, and credit card payments.
These effects can be either positive or negative. If you pay your HOA fees on time, that may help improve your credit score. If you are late or delinquent on your HOA payments, you will likely see a negative effect on your score.