Here’s how the COVID-19 pandemic could have hurt your credit rating

SAN ANTONIO – There are reasons to check your credit reports if you’ve made qualifying deferred payments for homes, cars, colleges, credit cards and more during the COVID-19 pandemic. If payments were flagged as late, it could hurt your credit score.

The Cares Act passed by Congress in March 2020 was a lifeline for many people who had lost their wages. Companies that offered federally guaranteed mortgages and student loans provided deferred payments that did not affect the borrower’s credit rating. Some car financers and credit card companies have voluntarily done the same to help cash strapped people.

But, instead of listing the accounts as up to date, a Consumer Reports survey found that some companies reported these deferred payments as overdue, a mistake that can have a big impact on a credit score.

“In terms of getting a credit card, a mortgage, or even a student loan, it can mean the difference between getting a good rate, a bad rate, or no loan at all,” said Lisa Gill of Consumer Reports.

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Credit report errors are not that unusual. One study found that one in four people had at least one error in their reports. And, complaints about it to the Consumer Financial Protection Bureau have reached record levels.

“It’s a problem that existed long before the pandemic, but it’s an even bigger problem today because so many people have been affected by the crisis,” said Gill.

To check for errors, log in to annualcreditreport.com to get free copies of your credit reports from the three bureaus, Experian, Equifax, and Transunion. If you find an error, dispute it in writing and send the letter and any supporting documents by certified mail. It may take at least 30 days to get a response, so it’s wise to keep checking until the error is corrected.

Copyright 2021 by KSAT – All rights reserved.

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