In a surprising and consumer-friendly gem, congress had the wherewithal to look out for our credit scores and profiles during this tough time.
If your lender whether it is a mortgage or a credit card agrees to an ‘accommodation’ such as an agreement to defer or more payments, make a partial payment, forbear any delinquent amounts, modify a loan or contract, or any other assistance with you then your credit will not be negatively impacted by that deferral.
Technically, this is known as credit protection.
The credit protection covers the period from January 21, 2020, and ends on the later of 120 days after March 27, 2020, or 120 days after the date on which the COVID-19 National Emergency terminates.
That critical term of 120 days after the date of the Covid-19 National Emergency terminates could turn to be a lifesaver if the crisis gets worse than expected.
That is great news because a lot of people are hurting now and having to make choices between what bills to pay.
Having the option to delay a big mortgage payment for 120 days or more by agreement while furloughed due to the crisis means you get to put food on the table without the added stress of trying to stretch unemployment checks, deplete savings or take out other loans.
As many of you know, you can check your credit score for free now with most credit card companies and companies like credit karma offering a free look.
You can also get free copies of each of your credit reports once a year from Annualcreditreport.com.
I recommend that you do so at least once a year and certainly check your credit reports if you defer any payments to ensure your credit is not harmed by incorrect reporting by your lender.
The full text of the law is here and starts on page 551.
For questions or concerns call Joe at 410-849-9529.
