Your credit report is a record of all open credit accounts you have, as well as your payment history with each of them. The three national credit reporting agencies—Equifax, Experian, and TransUnion—keep these records, and federal law gives you the right, under the Fair Credit Reporting Act (FCRA), to dispute errors and inaccuracies in your reports. Federal law also requires the agencies to respond to disputes within specific time limits.
Generally, the FCRA requires that credit reporting agencies and furnishers, like creditors, investigate disputes within 30 days of receipt of the consumer’s dispute. The agency can extend the 30-day period to 45 days if the consumer provides additional information relevant to the investigation during the 30 days. But the coronavirus (COVID-19) outbreak had a profound effect on how quickly agencies and furnishers could deal with disputes.
Like other businesses, credit reporting agencies and furnishers of credit information faced significant operational disruptions during the COVID-19 national emergency. In April 2020, in the early stage of the pandemic, the Consumer Financial Protection Bureau (CFPB), which usually enforces the FCRA, issued a statement saying it would give the credit reporting agencies and furnishers flexibility in meeting dispute investigation deadlines. The CFPB said it wouldn’t cite in an examination or bring an enforcement action for exceeding the deadlines to investigate such disputes, so long as they made good-faith efforts during the pandemic to do so as quickly as possible.
Now, however, the CFPB has changed its tune and announced it will resume enforcing the FCRA and rescinded the flexibilities given to the credit agencies and furnishers.
Under the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, if you made an agreement with a creditor or lender for payment relief because you were affected by the COVID-19 pandemic, that creditor or lender has to report your account as current if you weren't already delinquent. But you must have made the arrangement with the creditor or lender before falling behind on the debt to avoid adverse reporting, and you have to stick to the terms of the deal. You can’t stop making your payments, delay making payments, or pay less than the minimum amount without getting permission. If you were already delinquent at the time of the agreement, the creditor or lender can keep reporting the past-due status unless you bring the account up to date.
Some people, however, have taken a hit to their credit in violation of the CARES Act. The CFPB’s Consumer Response Annual Report says that credit report inaccuracies more than doubled during the pandemic. So, be proactive in reviewing and protecting your credit during this national emergency.
To protect your credit during the coronavirus crisis, you need to verify that the creditor or lender is reporting your account the right way by reviewing your credit reports regularly. Usually, you get the right to receive a free copy of your credit report from each of the three major credit reporting agencies once every 12 months. But because of the COVID-19 emergency, Equifax, Experian, and TransUnion are providing free weekly credit reports through at least April 2021.
If, after reviewing the reports, you find that a creditor or lender has improperly reported your debt as delinquent, you should file a dispute with the agency that made the report. The agency must respond by the deadlines imposed by the FCRA. If your dispute doesn't resolve the issue, you can add an explanatory statement to the report. Once you file a statement about the dispute with a credit reporting agency, the agency must include it (or a summary) in any report that includes the disputed information. If the agency helps you write the explanation, it may limit your statement to 100 words. Otherwise, there isn’t a specific word limit. But it’s a good idea to keep the statement very brief. That way, the agency is more likely to use your unedited account.
Effective date: March 31, 2021