WASHINGTON (3/22/10)--Consumers' debts and foreclosures have prompted the number of lawsuits involving collection and credit issues to increase 53% during fiscal 2009. And in a separate trend, consumers trying lower their debt under the government's mortgage assistance program are learning one result of their participation is a lower credit score. First, the lawsuits. According to the Administrative Office of the U.S. Courts, suits filed by individuals or state regulators under the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA) climbed to 6,463 during the fiscal year ended Sept. 30 (PaymentsSource.com March 19). However, the numbers were lower than the record counted for the 2009 calendar year by WebRecon LLC. The research firm tallied 8,287 FDCPA cases alone. The courts' count may not have properly categorized all FDCPA and FCRA cases, the firm said. A significant number of the suits were against credit reporting agencies. The numbers of foreclosures brought in federal courts under the Truth-in-Lending Act tripled to 1,517 for the fiscal year, according to the courts' data. Now, the loan modifications. According to housing counselors in New York and Michigan, borrowers who make their payments on time but sign up for the Obama administration's "Making Home Affordable" program are finding their participation knocks as much as 100 points off their credit score (The New York Times March 19). Their scores take a dive when they enter the $75 billion program's trial period in which they must make at least three payments. Delinquent borrowers have damaged their scores already. But credit agencies maintain that a loan modification request signals to them that the homeowner, even if managing to pay bills, is having difficulty. The problem is more serious for those who enroll in the Obama program but are then ruled ineligible. Homeowners accepted into the program and who succeed in getting their loans permanently modified will see lenders updating the credit bureaus. Their new status neither helps nor hurts their score. If they continue to pay bills as agreed--they will see the score increase over time, one agency told the Times.