What are NDC and DPC Codes?

In the wake of COVID-19 we’ve seen unprecedented measures to protect consumers and businesses with deferment options on loan payments. This has brought to light the use of specific reporting codes (NDC & DPC) available to financial institutions during an emergency.

The Natural Disaster Comment Code (NDC) and the Deferment Payment Code (DPC) are used by institutions when reporting on a consumer’s account during a natural disaster. The most recent example would be Hurricane Harvey. These codes change the reporting status of a specific line item, neutralizing the the payment history and can impact a consumer’s credit score depending on the scoring model (VantageScore vs. FICO). Under the CARES Act, companies are required to report accounts as “Current” if they are in forbearance or deferred. This is where you could potentially see the use of these specific codes. Based upon a report by the Bureaus of Consumer Financial Protection, most institutions won’t use the NDC or DPC code in an emergency, but if they do, it is on accounts with high balances or large loan amounts.

Unfortunately, there is limited information about the use of these codes and specifically how they impact a consumer’s credit score. As we get further into this pandemic, we anticipate that we will start to get a better understanding of how financial institutions will report information for their clients impacted by COVID-19.

Until then, we recommend regularly checking your credit report and reviewing each line item closely. You can subscribe to credit monitoring or take advantage of the new weekly reports available through annualcreditreport.com. Regardless of what reporting codes are used during this pandemic, it’s important to be vigilant while protecting your credit health from errors and mistakes.