Hundreds of consumers across the country are up in arms. They said their credit is being ruined all because lenders are mistakenly putting black marks on their accounts.
This is an urgent warning for all consumers who deferred making credit card, car loan, or mortgage payments amid the pandemic. Lenders are not supposed to penalize you for COVID-related relief, but unfortunately, in many cases, that is exactly what they are doing.
"I'm in event marketing, and my job was canceled because of the coronavirus," said Dan Murphy of Newtown Square, Pennsylvania. Concerned about finances, Murphy said he contacted his bank for mortgage relief. "The two most important things to me are my credit score, my mortgage, and my house. And I take care of them above everything else," he said. "I've had my mortgage for eight years, and I have never missed a payment," Murphy told the Troubleshooters he entered into a mortgage forbearance agreement for April and May. The agreement should have meant he could put off payments without penalty and without being labeled delinquent.
But guess what Murphy says happened? "I went back to paying my mortgage, but they didn't file the paperwork properly, which then put me into delinquency," he said. And that could have a huge impact on Murphy's excellent credit score. "It is a nightmare, and, if you have a good credit history and you miss one late payment, a single late payment that can make your score plunged by as much as 100 points, and it will take you a long time for that score to go back up," said Herb Weisbaum, a credit expert for Checkbook.org.
The CARES Act
prohibits lenders from putting negative information on consumers' credit reports given mortgage relief or assistance related to the COVID-19 emergency. But hundreds of consumers across the country say the lenders are putting black marks on their credit anyway. "If you were applying for a loan, renting an apartment, trying to do something of that nature, even applying for a job, it could damage those hopes of what you're planning to do. So this can have very, very serious consequences," said Weisbaum.
So here's what you need to do: "If you get any sort of accommodation from a lender, you need to document that in case something goes wrong, that could be taking a screenshot that could be getting some email that verifies what's taking place," said Weisbaum. That way, if something goes wrong, you can show proof of your case and get the error corrected. Second, check your credit report now and regularly moving forward. "You need to do that at all three of the credit reporting agencies, Equifax, Experian, and TransUnion. Right now, you can check your credit report for free every single week until April of 2021. You go to annual credit report.com - that's the only place you should go, annualcreditreport.com - and you can check your report once a week, and you want to make sure that that account has not been reported as delinquent when you were promised that it wouldn't be by the lender," he said.
Meantime, Murphy has another warning. He said his bank wasn't clear about how he would have to pay back the amount in forbearance. "When I first contacted the bank about the forbearance, the way that they explained it would be that the payments would be tacked successively on to my mortgage, extending it by two months. Instead, it's in the form of a balloon payment that will be due in total at the end of my mortgage. The bank told me one thing, and they did another thing. It's been a very frustrating experience for me, especially considering the poor customer service that I received during the entire experience," said Murphy. Fortunately for Murphy, the bank's error was corrected quickly enough that his credit score did not take a nosedive. Still, many other consumers said they have not been so lucky, so again, check your credit report and score and if there are any issues, contact your bank and the credit bureaus right away.
Is your credit score suffering because of deferments .... https://6abc.com/covid-19-credit-score-check-pandemic-deferred-payments/6391863/