COVID-19 and Your Credit Score
Written on Aug 12,2021 by Joe Mahlow
Wondering how your credit score is being impacted by the pseudo-apocalypse we’re currently scrambling in?
Well, while data is still being collected and it is largely unknown how that affects individuals, it may not be quite as dire as that.
Keep in mind that different credit reporting agencies have slightly different scoring methods and models. In some cases, the data itself is even being reported differently, in a rather unprecedented move. There’s a lot of production regarding how different situations should be handled and reported, and which ones could impact credit scores. Here’s some guidelines for you to keep in mind moving forward through these uncertain times:
- You have credit rights!
The FCRA, Fair Credit Reporting Act, is a 1970 law that gives you, the consumer, rights regarding your credit reports. This includes the capacity to dispute credit reporting errors, as well as requires credit reporting companies to include accurate and current information.
- If you’ve been impacted by COVID-19, you can get loan accommodations without a credit score impact.
When Congress passed the CARES Act, it ensured a certain amount of protection for consumers. It means that when banks and lenders provide payment deferrals or other forms of relief because of COVID, it shouldn’t negatively impact their score.
What We DO Know About COVID-19’s Credit Impact:
So, we now know that there is a certain amount of credit score protection for individuals impacted by COVID-19, particularly regarding payment deferrals. These deferrals should not affect your score. The challenge is to make sure these deferrals are being treated consistently and fairly across all the credit reporting bureaus, otherwise it’s even more difficult to predict the impact on your score.
You have the right to review your credit score, and many Financial Technology, or fintech, companies have made that easier and free to do. Through them you can check your score regularly and then contact your credit reporting agency regarding any inaccuracies, particularly those related to COVID-19 loan payment deferrals.