topic Re: Deferred Covid-19 Payments May Report as Late in Credit in the News

Deferred Covid-19 Payments May Report as Late

Brian_Earl_Spilner — Fri, 03 Apr 2020 20:43:29 GMT

https://www.thestar.com/business/personal_finance/2020/03/30/prevent-your-credit-score-from-diving-during-covid-19.html

“The credit reporting agencies, Equifax and TransUnion, don’t qualify the information they receive. The only thing that matters is how lenders’ systems report deferred payments to them — as late or not.”

Uh-oh.

Re: Deferred Covid-19 Payments May Report as Late

Anonymous — Fri, 03 Apr 2020 20:55:12 GMT

@Brian_Earl_Spilner wrote:
https://www.thestar.com/business/personal_finance/2020/03/30/prevent-your-credit-score-from-diving-during-covid-19.html

“The credit reporting agencies, Equifax and TransUnion, don’t qualify the information they receive. The only thing that matters is how lenders’ systems report deferred payments to them — as late or not.”

Uh-oh.

I was very close to warning folks about this in other threads RE: the topic.

Even if properly deferred, things can get tricky when dealing with large corporations. I'd say to utilize these deferments only if ABSOLUTELY necessary.

Re: Deferred Covid-19 Payments May Report as Late

Anonymous — Fri, 03 Apr 2020 23:03:43 GMT

Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.

Re: Deferred Covid-19 Payments May Report as Late

Brian_Earl_Spilner — Fri, 03 Apr 2020 23:23:54 GMT

@Anonymous wrote:
Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.

I highly doubt that it won't be something we can dispute or can get an update from our lenders. The issue is really going to be any avalanche of AA stemming from it. This is not the time for a derogatory to pop up, especially if it's on a home or auto loan as those are known to be the last things people will default on. A computer SPing and having it programmed to look for that and enact AA would be a huge problem for many.

Re: Deferred Covid-19 Payments May Report as Late

Anonymous — Sat, 04 Apr 2020 00:42:52 GMT

@Brian_Earl_Spilner wrote:
@Anonymous wrote:
Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.
I highly doubt that it won't be something we can dispute or can get an update from our lenders. The issue is really going to be any avalanche of AA stemming from it. This is not the time for a derogatory to pop up, especially if it's on a home or auto loan as those are known to be the last things people will default on. A computer SPing and having it programmed to look for that and enact AA would be a huge problem for many.

Plenty of people still don't check their credit despite all of the free sources out there too. People who already have less than perfect credit may not find out until they try to get additional credit that they have this black mark to take care of. When my roommates pulled their reports for me to help them start rebuilding, neither of them had been bothering to check (and they still don't check now) and they both had collections they had no knowledge of. Neither one of them even had any idea how to start filing disputes and one of them works for a mortgage servicer and is actually the one who does the paperwork for deferrals and modifications.

Re: Deferred Covid-19 Payments May Report as Late

delaney1 — Sat, 04 Apr 2020 15:57:16 GMT

Yikes! I hope that doesn’t happen with my two Capital One cards. My account does say minimum payment has been met though I wonder how it will report on my file in terms of payment.

i wonder if it’s a tad different for mortgages since that’s the main focus of this article.

Re: Deferred Covid-19 Payments May Report as Late

Brian_Earl_Spilner — Sat, 04 Apr 2020 17:29:03 GMT

@delaney1 wrote:
Yikes! I hope that doesn’t happen with my two Capital One cards. My account does say minimum payment has been met though I wonder how it will report on my file in terms of payment.

i wonder if it’s a tad different for mortgages since that’s the main focus of this article.

Honestly, it applies to anything where a payment will be missed. If a credit card lender let's you skip a payment and it doesn't report correctly, you're in the same boat. Less chance of AA though.

Re: Deferred Covid-19 Payments May Report as Late

Anonymous — Sat, 04 Apr 2020 18:00:43 GMT

Interesting. I've considered taking an offer on my personal loan from marcus, that after making 12 on time payments i can skip one. Well I was thinking about accepting such offer to help push the last payment out, and keep it from being paid off so soon and seeing any score drop from a closed loan.

But after reading this I wonder if that would be considered a deferment, and would show up as a missed payment. lol

Though i would assume since this is a perk that's included, they would report it as normal.

Re: Deferred Covid-19 Payments May Report as Late

delaney1 — Sat, 04 Apr 2020 18:08:25 GMT

@Brian_Earl_Spilner wrote:
@delaney1 wrote:
Yikes! I hope that doesn’t happen with my two Capital One cards. My account does say minimum payment has been met though I wonder how it will report on my file in terms of payment.

i wonder if it’s a tad different for mortgages since that’s the main focus of this article.
Honestly, it applies to anything where a payment will be missed. If a credit card lender let's you skip a payment and it doesn't report correctly, you're in the same boat. Less chance of AA though.

Well, I went ahead and made the minimum payment just to be safe. Interest is deferred, so that’s a very small price to pay to not get caught up in a potential headache. Thanks for the article!

Re: Deferred Covid-19 Payments May Report as Late

Nomad3 — Sat, 04 Apr 2020 19:46:41 GMT

I thought they would tag it as "no data" for the deferment?

Re: Deferred Covid-19 Payments May Report as Late

CreditInspired — Sun, 05 Apr 2020 20:11:37 GMT

Great article Brian_Earl_Spilner. Thanks for sharing.

Re: Deferred Covid-19 Payments May Report as Late

Brian_Earl_Spilner — Sun, 05 Apr 2020 20:58:57 GMT

@Nomad3 wrote:
I thought they would tag it as "no data" for the deferment?

Who really knows how it will be reported? Having worked at chase auto, I know that deferment plans already existed, so they shouldn't have any issues. But, if a lender does not normally offer deferments, we don't know what will happen. Especially with something of this magnitude.

Re: Deferred Covid-19 Payments May Report as Late

tcbofade — Mon, 06 Apr 2020 21:43:22 GMT

...and every lender may report differently.

I've got a local CU that will allow you to skip your December loan payment if you've made the previous eleven payments on time... it's wrapped around to the end of the loan, interest still applies, and they still report as paid that month.

Re: Deferred Covid-19 Payments May Report as Late

ChargedUp — Tue, 07 Apr 2020 10:41:59 GMT

The article essentially shows that all the reporting burden is on any of the lenders that are offering deferred payments. If there are any lates reported, it's going to leave themselves red-faced once their names start coming out into the news and the general public, along with hoards of CRA disputes to deal with. I would assume these lenders are simply going to report an on time payment, or simply not report at all during the deferment period. While what we're experiencing is unprecedented, I would hope that their IT is at least competent enough to figure this out before causing damage to the credit profiles of otherwise good customers. (Seeing some of their websites, I know... this may be a tall order, but let's hope!)

Re: Deferred Covid-19 Payments May Report as Late

Adkins — Tue, 07 Apr 2020 07:43:00 GMT

@tcbofade wrote:
...and every lender may report differently.

I've got a local CU that will allow you to skip your December loan payment if you've made the previous eleven payments on time... it's wrapped around to the end of the loan, interest still applies, and they still report as paid that month.

My credit union does this every year, and sometimes during the year, if you've continued to make on time payments.

Re: Deferred Covid-19 Payments May Report as Late

iced — Tue, 07 Apr 2020 14:19:04 GMT

@Anonymous wrote:
Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.

Which leads to the question: why would anyone take assistance they don't need? People know deferrals and forebearances don't stop the interest, so it seems pointless to pay more for something if you don't need to.

Re: Deferred Covid-19 Payments May Report as Late

Anonymous — Tue, 07 Apr 2020 17:22:13 GMT

@iced wrote:
@Anonymous wrote:
Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.
Which leads to the question: why would anyone take assistance they don't need? People know deferrals and forebearances don't stop the interest, so it seems pointless to pay more for something if you don't need to.

Adding to your comment is my distrust of financials. As has been reported in this and other threads where questions exist on what get's reported to the credit bureaus it may pay to be very careful!

Re: Deferred Covid-19 Payments May Report as Late

Anonymous — Tue, 07 Apr 2020 18:01:29 GMT

@iced wrote:
@Anonymous wrote:
Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.
Which leads to the question: why would anyone take assistance they don't need? People know deferrals and forebearances don't stop the interest, so it seems pointless to pay more for something if you don't need to.

People are freaking out and trying to hold on to all the cash that they can in case something happens that inhibits their ability to pay later. I get the freak out, my roommate just told me literally while I was typing this that she's probably going to get fired because of a mistake she made on paperwork while in a psych med transition last month, I just hope the people who are taking advantage of all the assistance are prepared for the potential consequences.

Re: Deferred Covid-19 Payments May Report as Late

iced — Wed, 08 Apr 2020 14:46:17 GMT

@Anonymous wrote:
@iced wrote:
@Anonymous wrote:
Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.
Which leads to the question: why would anyone take assistance they don't need? People know deferrals and forebearances don't stop the interest, so it seems pointless to pay more for something if you don't need to.
People are freaking out and trying to hold on to all the cash that they can in case something happens that inhibits their ability to pay later. I get the freak out, my roommate just told me literally while I was typing this that she's probably going to get fired because of a mistake she made on paperwork while in a psych med transition last month, I just hope the people who are taking advantage of all the assistance are prepared for the potential consequences.

I can understand that some people are experiencing anxiety as a psychological response to events happening around them, but I guess I don't understand why some of those people allow that anxiety to interfere and modify their decision making processes. That's a question that's OT for this thread though, so I'll go read up on that elsewhere.

Re: Deferred Covid-19 Payments May Report as Late

Brian_Earl_Spilner — Wed, 08 Apr 2020 15:11:20 GMT

@iced wrote:
@Anonymous wrote:
Gonna be lots of "I wouldn't have taken it if I knew this would happen" misery going around. 7 years is a long time to deal with the repercussions of taking assistance you don't need.
Which leads to the question: why would anyone take assistance they don't need? People know deferrals and forebearances don't stop the interest, so it seems pointless to pay more for something if you don't need to.

Well, in my case, chase is deferring and not charging fees or interest. Normally they would continue to charge interest.