Forbearance tread lightly before you elect to skip nxt payment

[Keith C.]

An important note as there is a lot of discussion back and forth recently  on how Forbearance will be looked at on credit report and by lenders.  Keep in mind all  loan service'rs are not equal and need to report SOMETHING  to the credit agency. They cant just have January through DEC and than April and May are deleted .

To date there is no Federal Guideline  ( that I am aware of ) on what servicers can or should do ..  

Note and get in writing -- what the servicer or bank is offering you:  

1) Deferment Payment: Allows you to skip payments, and sometimes it puts your interest on pause, too. With deferment, your payments may be due once the designated time period ends or they may be tacked onto the end of your loan (basically extending your loan term).

  2) A Forbearance :  Allows  you to make reduced payments or no payments for a set period of time, though your loan continues to gain interest during this period. The skipped payments are then due at the end of that designated timeline. In some cases, a lender may let you spread those skipped payments out over a few months.

So if you must take the forbearance than you have no choice - take it .. But if you can avoid it  it may help you to do so to keep loan history intact.

In future loan lenders will  look at those that took a forbearance or deferment . 

Unless ::  legislation gets  passed which will dictate for better credit reporting and not allowing lenders to hold these programs against borrowers