Timeshares often start as dream vacations wrapped in glossy brochures. But for many, the financial reality hits later—rising maintenance fees, limited flexibility, and difficulty booking preferred dates. If you’re considering exiting your timeshare, you’re not alone. However, one big question stops many owners in their tracks: “Will leaving hurt my credit score?” The answer depends on how you exit and the steps you take along the way.
Many owners assume that timeshare payments are somehow “different” from traditional debt. Unfortunately, credit bureaus don’t see it that way. If your timeshare involves a mortgage or financing agreement, those payments are reported just like a car loan or personal loan. Even unpaid maintenance fees can be turned over to collections, which can appear on your credit report.Example: Imagine Sarah, who financed her timeshare with a 10-year loan. After losing her job, she fell behind on payments for six months. The timeshare company reported her delinquency, dropping her credit score by over 100 points. This affected her ability to refinance her home later that year.
The ideal way to exit a timeshare is to transfer ownership—either by selling it to another buyer or gifting it to a friend or family member. When handled properly, this usually has no negative impact on your credit. Once the legal transfer is complete and the resort updates their records, your financial obligations end.The catch? Timeshares often depreciate quickly, and demand is limited. You may have to price your timeshare attractively, sometimes even offering incentives like covering closing costs. Still, this route is typically cleaner than defaulting or walking away.
If selling isn’t realistic, some resorts offer voluntary surrender programs. Essentially, you give the property back to the resort in exchange for release from future obligations. When properly documented, these agreements generally do not involve collections or credit reporting.Real-world tip: Before signing anything, make sure you receive written confirmation that you won’t be pursued for future fees and that the account will be reported as “closed by agreement” rather than “charged off.” This small difference in wording can protect your credit score from unnecessary damage.
The biggest credit score damage happens when owners simply stop paying. If you default on your timeshare loan or maintenance fees, the developer can:
Collections can stay on your credit report for up to seven years, dragging down your score even after you’ve moved on. A single default can lower a good credit score by 100–150 points, affecting your ability to secure loans or even rent an apartment.
Many resorts have deed-back programs, allowing you to return the timeshare voluntarily if you meet certain eligibility criteria (like being up to date on fees). This option can be a good fit for owners who don’t want to sell or negotiate but still want a clean break.Unlike walking away, deed-back programs usually don’t involve credit damage because the transfer is mutual and documented. However, eligibility varies widely. Some resorts only allow deed-backs for fully paid-off properties.
Timeshare exit companies promise quick relief, but they come with risks. Some are legitimate, but many charge thousands of dollars upfront without guaranteeing results. Worse, some advise clients to stop paying while they “negotiate,” which can lead to severe credit damage.Practical advice: If you consider this route, check reviews, ask for a written timeline, and confirm how they’ll protect your credit during the process. In many cases, consulting a real estate attorney or working directly with the resort can be cheaper and safer.
Regardless of which path you choose, a few proactive steps can make a big difference:
These small actions can prevent long-term damage to your credit profile and give you more control over the narrative lenders see.
If your credit score does take a hit, don’t panic—credit damage is repairable over time. Focus on:
Sarah, from our earlier example, worked with a credit counselor and paid off two small credit cards. Within a year, her score climbed back up by 80 points. By year two, she was back in excellent credit territory.
Exiting a timeshare doesn’t have to mean destroying your credit. The key is being strategic and informed. Whether you sell, negotiate a surrender, or use a deed-back program, understanding how each option affects your credit puts you in control. On the other hand, walking away without a plan can leave a long-lasting mark that affects your financial future for years.By approaching the process thoughtfully and communicating clearly with your timeshare company, you can step away from unwanted vacation debt—without dragging your credit score down with it.