You've gotten through the last year relatively unscathed, but your credit report may have some collateral damage.
It's why the three major U.S. credit reporting agencies, Experian, Equifax, and TransUnion, have extended free weekly access to your credit reports through April 20, 2022.
The pandemic has upended the lives of millions of Americans, so it's more important than ever to have expanded access to resources that help people stay on top of their finances.
With that in mind, here are two ways the pandemic may have hurt your credit reports and what you can do to fix them:
1. Reported Errors
When the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed in March 2020, many Americans received accommodations with their credit card and mortgage payments, as well as loans, as long as they engaged in a repayment plan with the creditor before they fell behind on payments. The Act required the creditor to report these accounts as current to the credit reporting agencies.
Did that always happen?
Some creditors incorrectly reported these accounts as late or delinquent to the credit bureaus, causing many Americans to see significant drops in their credit scores.
If you are one of the millions of Americans who asked for some debt relief or accommodation during the pandemic, check your report carefully to ensure your creditors have been reporting accurately. If you notice an error on your credit report, you can either file a dispute online with the credit bureau or send them a certified letter asking them to correct the error, along with copies of evidence that support your case, such as canceled checks or a repayment agreement.800-656-4328 for assistance.
2. Fraudulent Activity
According to Fidelity National Information Services Inc., or FIS, which monitors fraud for approximately 3,200 banks, there has been a significant rise in attempted fraudulent credit card transactions since the beginning of the COVID crisis.
While many transactions are stopped before they cause damage, many others don't. And these fraudulent charges can end up causing big damage to a credit report.
Case in point: one Hanscom Federal Credit Union employee reported that her brother noticed his normally high credit score had dropped by over 100 points. When he checked his credit report, he spotted a $6,000 account marked as being in collections. The problem was the account wasn't his.
He was able to prove the account was opened fraudulently, but it took some time to get the information off his report due, in part, to how difficult it was to get things done during the height of the pandemic. He regretted not checking his report earlier; had he, he would have noticed a new account he never opened and questioned it sooner.
The best way to combat fraudulent activity is to check your credit report as frequently as you can to look for new mailing addresses attributed to you or accounts you don't recognize. The minute you spot something that looks wrong or suspicious, contact the creditor with your concerns, as well as the credit reporting agency to have them investigate for fraud.
Continuing free weekly access to credit reports will help consumers spot this kind of fraudulent activity early on their accounts, damaging information that can derail a mortgage or rental application, result in higher interest rates on loans, or even prevent you from getting a job offer.
Your credit report contains information on where you live, how you pay your bills, and if there are any public records on you (bankruptcies or foreclosures) or collection activities pending. It does not tell you what your credit score is.
To get your free weekly reports through April 2022, visit AnnualCreditReport.com, the official site authorized by federal law.
If you need some help understanding your credit reports or would like to know what your credit score is, we can help! Contact us for a free credit report and score review today. Learn more here about how our credit experts can help you understand how your report and score affects you financially.
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