Coronavirus/COVID-19 and Credit Reporting

The recent Coronavirus pandemic has wrecked havoc on the economy and on the finances of many Americans. While the federal government has taken steps to help, as on now, there appear to be no breaks for credit reports and credit scores.

As the Wall Street Journal reports:

Legislation that would have prevented credit bureaus from reporting negative credit information for four months was shelved in the lobbying frenzy ahead of last week’s passage of the roughly $2 trillion economic stimulus bill, lawmakers said.

The credit industry argued that it already has adequate measures to protect people’s credit during disasters, and that incomplete reporting would lead to lasting problems in determining people’s creditworthiness.

Since Congress failed to act, consumer groups like the National Consumer Law Center are advocating for states to take action. The suggestions include:

Allow consumers impacted by COVID-19 to report to credit and other consumer reporting agencies (CRAs) that they have been affected by COVID-19 and require such CRAs to include a COVID-19 alert in their credit or other consumer report.

If a consumer’s credit or other consumer report includes a COVID-19 alert, or if the consumer informs the user of a consumer report that information in their report was the result of the economic impact of COVID-19, the user is required to disregard COVID-19 related information. Users would include lenders, employers, or landlords.

If the consumer’s credit or other consumer reports includes a COVID-19 alert, prohibit credit scoring models from treating as a negative factor any adverse events that occurred during the COVID-19 crisis.

It should be noted that the FCRA preempts most state law so state options are limited.

Finally, Forbes has published a few tips for consumers concerned about their credit reports. The most important is to dispute any inaccurate information that shows up on your credit.