How has the pandemic affected your credit score? The pandemic has effected everyone in many ways different ways but credit scores especially have been fluttering a little more than usual. Many card holders have been suffering from a heavy decrease in their credit score. However, these credit owners are not sure where they went wrong. Many people suffering from this decrease in score say that there is no reason that their score should have dropped as it did and it is affecting their purchases and future financial plans. This year complaints to the Consumer Financial Protection Bureau about credit report errors have peeked at record numbers.
It is important to consistently check credit reports for errors to ensure that there are no mistakes that will greatly harm your overall score. A bad credit score will have an effect on big purchases such as home buying, car payments, or even plans in entrepreneurship. Credit report errors have long been an issue in the United States. A study conducted in 2012 by the Federal Trade Commission, reported that 1 in 4 consumers had at least one error in their credit report. As this has been an issue in the past, credit bureaus had a thirty-day window to resolve these errors. However, recently due to covid-19, the CFPB gave the bureaus more time but did not give a strict time restriction on how long this extension would be. Rather, the CFPB stated that the credit companies must make a good-faith effort to amend the errors.
It has been shown that throughout the pandemic some credit companies either disregard or are somehow unaware of new laws passed in order to help credit owners. Specific acts such as the CARES Act which was designed to help people who were struggling during the pandemic by extending the time period for cardholders to make payments. With that, some credit companies did not take this into account and reported the delayed payments as late on the credit report causing the cardholder’s score to decrease greatly.
With the extensive amount of data involved in credit reports, it is no surprise that an error will occur every once in a while. However, with the pandemic, there is all the more reason to be checking each and every last detail on credit reports. Most recently, it has been found that some of the most common errors stem from covid-19 related deferred payments, repeated loans, or debt collections that are marked incorrectly on the report. Additionally, it is important to protect your information from fraud. Ensure that your card information is only linked to active services and removed from service accounts that are no longer in use. By checking credit reports regularly, you can avoid wrongful decreases in your score and negative effects in future applications and payments.
