Protecting your credit during the coronavirus pandemic - Part 1

by Liane Fiano | Care of Consumer Financial Protection Bureau
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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.
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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.
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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:

• Defer or pause one or more payments
• Make a partial payment
• Forbear (temporarily stop paying) any delinquent amounts
• Modify a loan or contract
• Receive a suspension for federal student loan payments
• Other assistance or relief

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:
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• If I can’t make my payment as a result of the coronavirus, what are the hardship or relief programs available?
• Are there fees associated with any of these programs?
• Will I have the option of deferring the repayment of any amounts owed to the end of my loan?
• If I’m able to defer or lower my monthly payments, will interest continue to accrue during this hardship or relief period?
• How long does the hardship or relief period last and when will I need to start repaying?
• If my financial situation hasn’t changed once the hardship or relief period ends, what will be the options?
• How will this agreement or relief be reported to the credit reporting agencies? Note: that the recently passed CARES Act places special requirements on companies that report to credit reporting agencies if they provide payment relief due to coronavirus.
• For credit cards—will I lose the ability to use my card if I enroll or request relief?

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:

• Find the name of your lender on your statement.
• Check the lender’s website to see if there are hardship or relief programs available.
• Call your lender and find out the available hardship or relief programs.
• Ask questions about the terms of the accommodation, including how it will be reported to credit reporting agencies.
• Find out what you need to do once the relief or agreement period has ended. Ask what the options are for repayment, such as repaying the amount you missed at the end of your loan.
• Confirm the agreement or relief in writing and ask the lender to confirm the agreement in writing.
• Comply with the agreement and make any payments as agreed.
• Check your credit reports to make sure they accurately reflect the agreement with your lender. There may be some delay in the creditor updating the records with the credit reporting agencies, so you may want to check monthly to ensure your credit records reflect your agreement accurately. You can now request your credit reports for free weekly from each of the nationwide credit reporting agencies through April 2021 by visiting AnnualCreditReport.com .
• Dispute any errors that you find in your credit reports. If your accommodation is not accurately reflected in your credit reports, reach out to both your lender and the credit reporting agencies and dispute those errors. Attach any documents if you can to show that it is not correctly reported.
• If you don’t know or aren’t sure about repayment, reach out to your lender before the end of the relief or agreement period to confirm next steps and what the options are to repay any missed payments.