When it comes to qualifying for a loan for the purchase of a home or car, having a good credit score is very important. Your credit score is based on many things, such as paying your bills, loans, and credit cards on time. But with the spread of COVID-19, many Americans have been left without a job or with reduced hours, making it difficult to make ends meet.
In response to this dilemma, the Consumer Financial Protection Bureau (CFPB) has issued a policy statement that outlines what credit reporting companies are to do during this time.
Offering More Flexibility
As a response to the COVID-19 pandemic, a lot of lenders are offering assistance to consumers through loan extensions and reduced interest rates. However, the CFPB has expressed the importance of lenders reporting correct information regarding their measures of flexibility during this trying time. “An effective consumer reporting system is critical in promoting fair and efficient access to credit in the consumer financial services market,” said CFOB Director Kathy Kraninger.
At the end of March, Congress passed the CARES Act, which requires lenders to inform credit bureaus as to whether or not consumers are up-to-date on their loans if they have sought help from lenders due to the virus.
Reporting Accurate Information
The CFPB is ensuring that lenders comply with the Act, and is encouraging lenders to voluntarily provide relief for payments and to report accurate information to credit bureaus. The Bureau has expressed that there are many benefits to doing this for both consumers and the economy in general.
The CFPB is also allowing more flexibility for lenders and credit bureaus regarding the amount of time they need for reviewing disputes. The Bureau has said that it does not intend to punish these entities for failing to make the deadlines for investigating disputes as long as efforts are made in good faith to investigate these disputes quickly.
The CFPB has shared some helpful resources with consumers pertaining to how they can protect their credit, what they should do if they cannot make a payment and more.
