Consumer Resources for COVID-19 Part I: Protecting Your Credit

We are living in unprecedented times. The COVID-19 pandemic has radically affected the lives of all Americans. This is the first in a series of posts providing you information and resources to help.

Today, I participated in a Continuing Legal Education class on Consumer Law. The speakers provided a wealth of information on the new laws and regulations enacted to help people since the pandemic began. While the government’s response to the pandemic may not have been perfect, there is help for consumers, especially regarding financial impacts.

The first topic I want to discuss is Protecting Your Credit. Your personal credit report is a report card on your financial responsibility and health. It is a tool lenders use to determine whether you are credit worthy – whether they should lend you money. Potential employers may also look at your credit to determine if you are a good fit for a position, i.e., a bank won’t necessarily want to hire someone with bad credit because it shows they may not be financially responsible.

I recommend everyone obtain their free credit report annually. All Americans are entitled to 1 free credit report from each credit bureau - TransUnion, Equifax, Experian – each year. You can obtain your free credit report at: AnnualCreditReport.com

I request a report every four months, rotating through the credit bureaus, that way I’m looking at my credit three times a year. You should monitor your credit closely, no matter what kind of debt you have (e.g., credit cards, student loans, home loans).

To cope with the financial impacts of the pandemic the three credit bureaus are offering you a FREE credit report from each credit bureau every WEEK! These free weekly reports are available until April 2021. You can access these reports at the same link.

Another major help under the CARES Act, is if you ask your lender for help because you are financially impacted by the pandemic, your credit will remain the same as it was before you asked for help.

This means, if you are current on your loan, but know because of the pandemic you are likely not going to be able to stay current, reach out to your lender and ask for help. There are options available (I’ll discuss those more in the next post). Once you receive “forbearance” or help from the lender, for the duration of the pandemic and until 120 days after the pandemic is declared over, your account will continue to be reported as current. If your account is already late, your account will be reported as it is, e.g., if you’re 30-days late, you’ll be reported as 30-days. So the sooner you ask for help the better!

The National Consumer Law Center posted an excellent paper detailing how these Credit Report protections work, which you can access here.

It is more important now than ever to protect yourself and your credit. The cultural impacts of COVID-19 will last for an unknown time. What we are trying to prevent is the economic effects of the pandemic crippling Americans financially for decades.

In Part II of this series , I’ll provide resources you can go to for more information on the financial help available.

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