The economic damage caused by the COVID-19 pandemic will soon translate into credit damage as consumers are unable to pay their bills and various creditors and debt collectors begin negative reporting to the credit reporting agencies. Consumers should be mindful of their credit report during this time and utilize the few protections provided by the federal CARES Act.

            The legislation mandates protection from negative credit reporting when a consumer has been approved for an “accommodation.” This means there is an agreement for a payment forbearance, payment deferral, a partial payment agreement, or some other type of relief to people who have been impacted by the pandemic. 

             The CARES Act only mandates accommodations for federally backed mortgage loans and student loans. Other types of loans are not covered and relief is left to the discretion of the creditor. Regardless of the type of loan you have, consumers should be proactive in seeking accommodations from their creditors if their financial situation has suffered due to the COVID crisis.

            It is important to understand that all accommodations, once approved by the creditor, should qualify for credit reporting protections. This would include those required by state or local emergency orders and covers all types of obligations, such as mortgages, credit card accounts, car loans or any other type of loan.

            Given the large volume of activity that creditors and credit reporting agencies are sure to face in the months ahead, it is reasonable to expect errors to occur. Consumers should monitor their credit reports closely and watch for any inaccuracies.

            If mistakes have been made, the consumer should initiate a written dispute with the credit reporting agencies. This dispute letter should clearly identify the problem or problems and demand that the issue be investigated and corrected. If the problems persist, you should seek counsel from an attorney to enforce your rights under applicable federal law.