The Coronavirus Pandemic and the Credit Reporting System 

The Coronavirus pandemic has caused unprecedented dislocation in the daily lives of Americans and dramatic—and uneven—economic impacts. Millions of Americans found themselves suddenly out of work or furloughed, and those job losses were concentrated among middle and working class families and people of color. What was originally believed to be a short term disruption dragged on for months. Some segments of the economy have experienced a sharp recovery, but many Americans’ lives and livelihoods continue to be severely harmed by both the virus and the containment measures. The recovery from this recession will be long and challenging. 

The federal government’s response to the economic consequences of the pandemic included direct stimulus payments, expanded unemployment insurance and new requirements that creditors make accommodations on some federally backed loans. But regulations requiring Credit Reporting Agencies investigate consumer complaints regarding errors in their credit reports were relaxed, leading to a massive spike in consumer complaints to the CFPB about the CRAs. While the financial assistance and loan accommodations have undoubtedly helped consumers, the relaxation of regulations and the unprecedented dislocation has also created more complexity and uncertainty in the credit reporting system. 

As the only consumer advocates in the credit reporting system, AACCP members can help American consumers navigate these perilous times. They know how the new laws and regulations should be applied and how to spot mistakes in credit reports that could otherwise go overlooked. They know how to educate consumers on up-to-the-moment changes in laws and regulations that could impact them, and they can provide monitoring assistance to consumers to prevent unscrupulous actors from trying to take advantage of this crisis at their expense.   

The steep economic downturn is going to lead to a large number of new adverse information in consumers’ credit reports. The negative economic impact has already fallen disproportionately on middle and working class Americans and communities of color. In the best of times, the Federal Trade Commission found that as many as 20% of consumers’ credit reports contain material errors. It also found that it was more likely that non-white Americans had errors in their reports than white Americans. This is not the best of times. AACCP members exist to ensure that American consumers get the access to credit products that they deserve and can help restore a measure of fairness and equity to a credit system that is weighted against Blacks, Hispanics, and other minorities.