Can a Timeshare Hurt My Credit Score?

Can a Timeshare Hurt My Credit Score? (Source: - used as royalty free image)

Timeshares can easily become a highly expensive proposition over time. And as with any other high cost financial obligation, a timeshare can quickly drag down your credit report or even ruin your credit altogether if you don't pay attention.

So just how drastically can owning a timeshare damage your credit score?

Let’s say that buying a timeshare directly from the resort company can cost $20,000 to $40,000 or more, as our own Michael D. Finn explained to Credit Card Guide. In many cases, because of this steep price, timeshare owners take out a loan. On top of that, timeshare resort companies typically charge annual maintenance fees, which can run anywhere between $500 and $5000 and rise consistently (and at rates that may far exceed the annualized cost of inflation).

If you end up having trouble making your loan or maintenance fee payments, some resorts might report the delinquency as a 30-, 60- or 90-day late payment, which can negatively impact your credit.

To make matters worse, resorts sometimes categorize timeshare loans as “mortgages.” What this means is that if you stop making payments on your loan, it may be reported to the credit bureaus as a mortgage foreclosure. 

As Michael told Credit Card Guide, many resorts “try to pick the category that does the most damage to the consumer.”

In fact, this is akin to the situation that Finn Law Group recently helped settle in a class action lawsuit against Bluegreen Corporation, Experian Information Solutions, Inc., and Equifax Information Services, LLC in Best and Snapp, et al. v. Bluegreen Corp., et al.

The plaintiffs alleged that when they were delinquent, Bluegreen sent a series of letters advising them that they were terminated from the Bluegreen Vacation Club and the status of their accounts may be reported as foreclosures to the credit agencies in violation of the Fair Credit Reporting Act and Florida debt collection laws.

While the companies did not admit liability, we were satisfied with the resolution, which deleted the harmful “foreclosure” categorization from over 11,000 individuals’ credit reports. For more on the class action case – we encourage you to read more here.

What can I do to save my credit score? 

If you’re not able to make payments on your timeshare, what are your paths out of your stressful - and financially cumbersome - quagmire? Unfortunately, your choices tend to be limited. Because of the resort industry’s suppression of the timeshare resale market, there is not really a viable secondary sales market for many timeshares.

Timeshare redemption companies may offer you a way to rid yourself of your timeshare obligation, but often at a high cost and without a guarantee of timely success. What’s more, many scammers look to make a quick buck off of consumers eager to be rid of their timeshare, which leads to the pernicious spread of the “timeshare resale scam.” 

Led by Attorney Michael D. Finn with 45 years of experience, the Finn Law Group is a consumer protection firm specializing in timeshare law. Our lawyers understand vacation ownership as well as the many pitfalls of the secondary market of timeshare resales. If you feel you have been victimized by a timeshare company, contact our offices for a free consultation. Know your rights as a consumer and don't hesitate to drop us a line with any questions or concerns.

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