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CARES Act Forbearance - Score Drops 14 Points


CARES Act Forbearance - Score Drops 14 Points

Hi All,


Just wanted to share a data point. My wife applied for CARES Act Forbearance on her student loans. This was the only account for which she has done this. This month her score dropped 14 points and with only two changes on her profile "remarks" (which showed "affected by natural disaster" on her student loans) and an increase in the balance of her student loans by $5 (accrued interest during forbearance period). 


14 points seems punative. Though my guess is the score change was the result of the $5 increase in balance on her installment payments. Maybe there's an algorithm that looks for increasing balances on installs? If this is true, possible solution is to keep paying interest to prevent increase in balance. Though her lender does not make it easy - the payment button has litterally disappeared from her account and shows next payment due in August. Smiley Sad 


Just wanted to share this datapoint. 

Message 1 of 5
Moderator Emeritus

Re: CARES Act Forbearance - Score Drops 14 Points

I don't think there is any penalty on increasing installment balances unless you cross a breakpoint which would be statistically near never since there only appear to be two such for aggregate installment utilization and there is no individual.


I have had numerous installment loans paid ahead over time which I will let float when I need money for other things and I haven't ever seen a drop in multiple different scorecards including my current pretty one on Experian where my auto loan has been ticking up for the last few months during a drunken spending fiesta including a new construction mortgage and all that entails.


I suspect your datapoint is conclusive with the remarks as we have heard about that from others too.  The remark is not necessarily benign.


If you want to be complete can post your aggregate installment loan balances and aggregate original balances before and after but as stated earlier it's patently unlikely.


Actually where did you see this change / what score are you referring to?

Message 2 of 5
Regular Contributor

Re: CARES Act Forbearance - Score Drops 14 Points

Are you referring to your Vantage 3.0 score?  If so, than yes... my wife and i both saw 15-18 point drops for the CARES forbearance with it pointing to the remark on the account.


This did not effect our Fico scores at all.

Message 3 of 5
New Contributor

Re: CARES Act Forbearance - Score Drops 14 Points

Just an FYI- 

This morning I got an alert of a comment update on my TU report. The comment regarding my student loans being in forbearance (CARES Act) had been removed. I am curious to see if the reporting has changed or if the bureaus have taken it upon themselves to correct an adverse situation that was unintended. 



Message 4 of 5
Super Contributor

Re: CARES Act Forbearance - Score Drops 14 Points

OP, when was the account in question opened? And how old is it in comparison to your oldest account and your average age of accounts?
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 5 of 5
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