The CARES Act and Your Credit Score
Wondering what the CARES Act does to protect your credit? We’ve put together some information to help you protect your credit score.
Based upon an article published by The Hill, “borrowers in good standing who are impacted by COVID-19 will be able to contact their lenders and apply for forbearance or a modified payment arrangement. Lenders will then continue to report their status as “current” with the credit reporting bureaus to avoid the reporting of any negative marks that would otherwise send credit scores plummeting downward.”
As it states above, if you take action and contact your creditors with the intent to find a repayment plan that works for you, you will have a higher likelihood of avoiding new derogatory marks on your credit.
If you are impacted by COVID-19 then you should follow these steps to work with your creditors:
Revise your budget and find out what accounts you can pay and how much.
Contact your creditor and ask them what options they have if you’ve been impacted by the COVID-19 pandemic.
Take detailed notes of their options and deferment terms.
Subscribe to a monthly credit monitoring program and check your credit regularly.
Keep track of the dates and amounts that you’re required to pay back.
In order to protect your credit score, you are going to have to be proactive in working with your creditors and making sure they follow through on any agreements made for modified or deferred loan payments. The changes made in the CARES Act are only for consumers who actively communicate with their creditors and were current on their loan payments before entering into a new payment arrangement.
If you have questions or have new derogatory items on credit that are a mistake, contact our team for a free evaluation to learn more about what you can do to get those fixed.
Stay healthy.