Experts Reveal the Hidden Risks
Timeshares are marketed as a pathway to stress-free vacations, but behind the glossy brochures
and promises of “luxury ownership,” there’s an underreported truth: your timeshare can affect
your credit in ways most buyers never expect.
A timeshare purchase isn’t just about vacations; it’s a financial obligation. If you fail to meet that
obligation—whether it’s loan payments, maintenance fees, or special assessments—the fallout
can follow you for years. Your credit score, your debt-to-income ratio, and your ability to secure
future financing are all on the line.
To uncover the real risks, we partnered with Vacation Ownership Consultants (VOC), an
experienced timeshare exit company with over a decade of reliable results helping families
navigate this complex industry.
How Timeshare Financing Shows Up on Your Credit Report
When buyers finance their timeshare, developers often open a tradeline to report the new loan.
However, instead of building equity in a home or tangible asset, you’re essentially financing a
luxury purchase that depreciates immediately.
Account Status Types That Can Appear for a Timeshare
Timeshare companies can report different account types on your credit report, depending on how
the loan is structured. Examples include:
• Installment Account
• Timeshare Loan
• Time Shared Loan
• Real Estate
MortgageWhile some of these labels may sound like traditional property debt, they don’t carry the same
financial benefits. Instead, they create recurring liabilities that can weigh down your credit file
without building equity.
How Timeshare Loan Reporting Can Impact Your Lending
Ability Negatively
Even if you stay current on your timeshare loan, it can still impact your credit in subtle but
damaging ways. Lenders calculate your debt-to-income (DTI) ratio to determine whether you
can handle additional borrowing.
A timeshare loan increases your monthly obligations, raising your DTI ratio. The higher your
DTI, the riskier you look to lenders. This can:
• Limit your ability to qualify for a mortgage or refinance.
• Reduce your access to auto loans, personal loans, or business financing.
• Force you into higher interest rates due to perceived risk.
As VOC emphasizes, many families are blindsided when they learn that their vacation purchase
now stands between them and buying a home or car.
Do Timeshare Maintenance Fees Affect Your Credit?
Loan payments aren’t the only credit risk. Timeshare ownership comes with annual maintenance
fees and, in many cases, special assessment fees. These charges can add up to thousands of
dollars each year.
If you fall behind:
• The resort or management company may report delinquency directly to credit bureaus.
• Past-due accounts may be sent to collections, showing up as derogatory marks.
• Your FICO score can take a hit, even if you’re current on other obligations.
• You may be pursued legally for the delinquent amount, late fees, interest and legal fees.
What makes this especially tricky is that fees often rise annually, leaving owners unprepared for
the long-term financial strain.
Timeshare Default and Its Credit Consequences
If payments stop completely, owners can face foreclosure. While it may sound less serious
because it’s “just a timeshare,” the consequences can mirror a home foreclosure.
• The foreclosure or a timeshare default can appear on your credit report.
• Negative reporting may remain for seven years or longer.
• It can devastate your ability to borrow in the future.
The good news? Timeshare owners may have options to prevent derogatory timeshare default
reporting with an unwanted timeshare if they are proactive. They may also challenge potential
timeshare default violations under the Fair Credit Reporting Act (FCRA) with an experienced
attorney. Acting early can make a significant difference in limiting credit damage.
Why Canceling a Timeshare Isn’t as Simple as Walking Away
Some owners assume that if they stop paying, the developer will simply take the property back.
Unfortunately, it’s rarely that easy.
Timeshare developers often pursue collections aggressively, employing collection agencies and
even filing lawsuits. The result is not just financial stress but long-lasting credit damage and
potential legal issues.
The Role of Professional Timeshare Exit Companies in Protecting Credit
Getting out of a timeshare the right way is a proven challenge, especially in an industry filled
with misinformation and dishonest operators.
How Legitimate Timeshare Exit Companies Help
Legitimate timeshare exit companies, like Vacation Ownership Consultants, help families
navigate a process proven to be difficult in a dishonest industry. With over a decade of
experience, VOC has developed strategies tailored to each owner’s unique circumstances.
Unlike companies that promise “guaranteed” outcomes or mislead consumers with escrow
gimmicks, reputable timeshare exit professionals take the time to assess your situation and match
you with a strategy that works.
The Credit Advantage
How working with experienced professionals can provide you with options to put your
credit in a better position:
• Negotiate timeshare contract terms of release through an attorney-based process.
• Provide other tried-and-true timeshare release solutions.
• Identifying potential FCRA violations that can be challenged with an attorney.
This approach doesn’t just solve the timeshare problem—it can help preserve or even improve
your credit standing over time.
Steps You Can Take Now to Protect Your Credit
If you own a timeshare and are worried about its impact on your credit, here are practical steps
you can take today:
1. Pull Your Credit Report
Review all three bureaus (Experian, Equifax, TransUnion) to see how your timeshare is
being reported. You can obtain a free credit report at annualcreditreport.com.
2. Stay Current on Payments (if possible)
While exploring solutions, avoid missed payments that can trigger derogatory marks until
you have made a decision on the best timeshare exit strategy for your family.
3. Consult With Experts
o A credit repair specialist can help you understand and address derogatory
accounts.
o A reputable timeshare exit company, such as Vacation Ownership Consultants,
can evaluate your situation and provide reliable timeshare exit strategies.
4. Know Your Rights
If you suspect inaccurate reporting, speak with a qualified attorney about potential claims
under the Fair Credit Reporting Act.
Conclusion
So, does a timeshare affect your credit? Absolutely. From loan reporting to rising maintenance
fees and potential delinquencies or foreclosure, the risks are real—and often hidden from owners
at the point of sale.
The good news is that with the right help, you can take control before your timeshare spirals into
long-term credit damage.