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Senators introduce legislation that would suspend negative credit reporting

The bill will require lenders not to report missed payments for four months to help those impacted by the coronavirus pandemic

Summary

A new Senate bill asks for free unlimited credit reports and credit scores for a year after the pandemic ends and extends its protections to those impacted by future disasters

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The coronavirus pandemic is causing business closures, impacting peoples’ livelihoods and their ability to make bill payments, which will have a fallout on their credit scores.

Two U.S. senators have introduced legislation to aid such consumers. Sens. Brian Schatz (D-Hawaii) and Sherrod Brown’s (D-Ohio) “Disaster Protection For Workers’ Credit Act” asks for “an immediate four-month moratorium on all negative credit reporting.” Those who face “lasting financial hardship” from this pandemic will be eligible for longer-term protection.

Suspension of negative credit reporting

Schatz said in a news release, “Our bill will make sure people who fall behind on their bills won’t take a hit to their credit scores. Protecting credit scores now will give people a chance to rebuild their lives and our economy.”

And Brown noted, “During these uncertain economic times, Americans shouldn’t have to worry about their credit scores as they work to make ends meet. This is an important fix to ensure Americans can focus on staying healthy and supporting themselves and their families, not worrying about accessing credit in the future.”

The legislation also asks for consumers to get unlimited credit reports and credit scores for free, for a year after the crisis ends. The bill is also looking to provide its protections for consumers who are impacted by “major disasters” in the future.

Ed Mierzwinski, senior director for U.S. PIRG’s federal consumer programs, lauded this effort. He said in a statement that as a result of the coronavirus pandemic, many consumers will be late on their bill payments. This is already happening and it’s not their fault.

“The credit bureaus could help by not reporting negative information during this outbreak and the recovery, so consumers will have a chance to rebuild their financial lives,” Mierzwinski said. “But knowing that the credit bureaus won’t do it voluntarily, Congress must act.”

Card issuers provide some relief, too

Various card issuers have also offered to help consumers so that they can deal with these trying times.

According to a Wall Street Journal report, Discover Financial Services will not report some consumers’ missed credit card payments to the credit bureaus for at least two months. American Express, Bank of America, Capital One and others are asking customers to contact them for any help. And Apple Card is allowing its cardholders to skip their payment for March without incurring interest charges.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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