by Liane Fiano | Care of Consumer Financial Protection Bureau
If you are having trouble paying your bills, you may be worried about what will happen to your credit reports and scores. You can use the information below to manage and protect your credit during the COVID-19 (coronavirus) pandemic.
Reach out to your lender or creditor
Many lenders and creditors report your payment performance to credit reporting agencies (also known as consumer reporting companies or credit bureaus). This includes mortgage servicers and credit card companies, as well as utility providers, cell phone service, landlords, and others that you owe money to and who provide data on accounts in collection.
If you are having trouble paying your bills, it’s important to reach out to your lender or creditor. Many lenders and creditors have announced proactive measures to help borrowers impacted by COVID-19. The Coronavirus Aid, Relief, and Economic Security (CARES) Act has forbearance and credit reporting requirements that may apply to your situation.
As with other natural disasters and emergencies, your creditors or lenders may be willing—and in some case are required—to provide forbearance, loan extensions, a reduction in interest rates, and/or other flexibilities for repayment. Some lenders are also saying they will not report late payments to credit reporting agencies or are waiving late fees for borrowers due to this pandemic. Under the CARES Act, in certain situations, lenders are required to report your accounts as current.
You can reach out to your lender or creditor and find out what options or programs are available. These programs are sometimes called "hardship" or "relief programs." These programs may allow you to enter into an agreement to:
The CARES Act calls these agreements “accommodations.”
To reach out to your lender, look for a customer service number on a copy of your bill for your mortgage, credit card, auto loan, or other loan. Some lenders are facing high call volumes because of the pandemic, so the wait time may be long. You can also check your lender’s website to see if they have information that can help you, ways to communicate electronically, or online applications for hardship programs.
When contacting your lenders, make sure you have your account number and payment information available. Be prepared to discuss your financial and employment situation, as well as how much you can afford to pay considering your income, expenses, and assets. Have a list of questions prepared in advance. You want to make sure you’re completely comfortable with the terms before you make an agreement.
Here are some key questions to ask:
There are special forbearance or relief programs for some types of mortgages. To learn more, go to the Mortgage and housing assistance page.
Use our checklist when calling:
Marc has 36 years in financial services and 6 years in teaching.
Visit Us on Google