Understandably, people are focused on the immediate financial relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). However, the CARES Act also contains significant provisions related to credit reporting that all consumers need to know.
The CARES Act permits consumers who are affected by COVID-19 to obtain “Accommodations” from furnishers – such as deferred loan payments, forbearances, or other loan assistance. Furnishers are not required to make the accommodations. However, the CARES Act amends the Fair Credit Reporting Act to require furnishers of information who do make these accommodations to continue reporting the account using the consumer’s account status (for example, “current” or “delinquent”) at the time that the accommodation began, as long as the consumer is honoring the terms of the accommodation.
This applies to reporting on accommodations made to consumer accounts between January 31, 2020 until 120 days after the end of the COVID-19 national emergency (which likely will not be until the fall of 2020).
So what does this mean? Here is an example. If you entered into a payment plan with a creditor on February 15, 2020, and your account was previously reporting as “current,” if you are making the payments required under that payment plan, your account should continue to be reported as “current.”
Consumers should monitor their credit reports closely. If you have any questions or we can help, please send us an email at info@garibianlaw.com.