COVID-19 may have infected your credit score.
Record complaints about errors on credit reports are pouring in against the credit monitoring bureaus, according to a consumer group, and the pandemic is to blame.
But consumers like you are the ones paying the price for these mistakes, as credit scores are being pulled down. There are several important things you can do to protect yourself.
The law last March that provided the very first stimulus checks also instructed servicers of federally backed mortgages and student loans to let borrowers put their payments on hold.
Meanwhile, credit card issuers and auto loan providers voluntarily offered payment deferrals to their customers. Americans straining to keep up with their bills during the COVID economic crisis eagerly opted to take breaks from their loans and credit cards.
Days after the relief law was signed, the Consumer Financial Protection Bureau (CFPB) released a policy statement directing companies to report that consumers were “current” on their loans even when they were taking advantage of relaxed payment schedules.
The trouble started when some lenders and loan services erroneously reported the skipped payments as “late” to credit bureaus Equifax, Experian and TransUnion, whose credit reports on consumers are used to calculate credit scores. And people who’d paused their payments soon saw their scores drop as a result.
The issue has become so widespread that class-action lawsuits against credit card issuers and other financial companies have popped up in New Jersey and Washington courts.