CARES Act Deferments Leading to Credit Score Errors

Tod Caviness was negotiating to buy a house in Sanford when his wife, Christin, received an alert on her phone.

“His credit rating had dropped from 752 to 568,” he said, and Caviness discovered the same drop had happened to him.

The dramatic drop stems from a three-month deferral the couple received on their Bradenton home mortgage through the CARES (Coronavirus Aid, Relief, and Economic Security) Act. Passed in March, the federal stimulus bill allowed people facing economic hardship due to the coronavirus pandemic to defer payments on certain loans.

Although the CARES Act contains language to protect the credit of people who take advantage of it, issues similar to Caviness have cropped up across the country. In a letter to the director of the Consumer Finance Protection Bureau sent in October, the US Public Interest Research Group noted 13,000 complaints about credit reports from April to September, a 550% increase from the same period. last year.

The Consumer Finance Protection Bureau did not return calls and messages seeking comment.

Such problems were not limited to mortgages. In May, customers discovered that Great Lakes Educational Loan Services had incorrectly flagged many of their accounts as overdue instead of deferred. The lender and the three major credit bureaus now face a class action about the error.

“In this time of COVID, things are happening that aren’t usual,” said Francis Creighton, president and CEO of the Consumer Data Industry Association. Its trade association represents the big three credit bureaus Equifax, TransUnion and Experian, among others.

Christin had quit her job due to the virus earlier in the year. Caviness, a former Orlando Sentinel screenwriter, said he asked his mortgage agent, Cenlar, if a deferment request would affect his credit. He said he was told no because he was up to date with his payments before the adjournment began.

The credit drop came after they voluntarily ended the deferral and made their next applicable payment sooner. They had been declared delinquent on the entire balance of the loan.

Caviness said Cenlar wasn’t much help at first.

“Their response was basically, ‘Yeah, it happens,'” he said.

Repeated requests to Cenlar for comment on this story have gone unanswered.

Creighton offered advice on resolving issues such as these quickly.

“Consumers should check their credit report,” he said. He suggested using AnnualCreditReport.comthat people can consult for free up to once a week without cutting into their credit.

“If they see something that doesn’t seem right, they should immediately contact the lender and the credit bureau whose report they are reviewing and file a dispute,” he said.

Disputes can be filed directly from the credit bureau websites: Equifax.com, experian.com and TransUnion.com. Disputes must be filed with each agency individually.

Caviness did and continues to come and go with agencies and Cenlar.

Two of the agencies have since changed their scores, but only after Caviness lost its spot bidding on the Sanford home. Since he has already sold his home in Manatee County, he and his family are forced to move in with relatives until the issue is resolved.

On December 3, Cenlar sent the Cavinesses an unsigned letter of apology for the mistake, saying it would be resolved. However, Cenlar responded to Caviness’ dispute over his wife’s Equifax score with “no changes necessary”, which dragged out the process.

“It’s hard to even touch a human being,” Caviness said.

Want to reach out? E-mail [email protected].

Comments are closed.