3 Things to Check on Your Credit Report After Coronavirus Relief
If you are one of the many people whose financial situation has been negatively affected by the coronavirus, you may have taken advantage of forbearance or deferment programs from your lender. If you did take part in one of these programs, here are three items you should check to determine if the information has been accurately reported to the credit bureaus.
1.Check that your account with your lender is reported as "current" or "OK"
If your account status was current when you entered into the forbearance or deferment program, it should continue to be reported as current when your account is in the forbearance or deferment program. The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) requires that lenders continue to report the account as current: "if a furnisher makes an accommodation with respect to 1 or more payments on a credit obligation or account of a consumer, and the consumer makes the payments or is not required to make 1 or more payments pursuant to the accommodation, the furnisher shall—(I) report the credit obligation or account as current."
To make sure your account is reported as current, locate the account on your credit report and look for either "current," "OK" or a checkmark. How the "current" status is displayed may differ depending on where you get your credit report.
Here are three examples of how a "current" status could be shown on your credit report:
2. Check for an "AW" comment code
Comment codes (also referenced as narrative codes or remarks codes) are a standardized set of codes used by lenders and credit bureaus to provide further details about the information on your credit report. There are dozens of different comment codes, but there are a couple of codes in particular that may be on your report if you have a forbearance or deferment agreement with your lender. It's important to note that you probably won't see the actual comment code on your credit report—instead you'll see what the comment code represents (more about that below).
One code you should look for is AW, and it represents "affected by natural or declared disaster." On your credit report you could see "affected by natural or declared disaster," "affected by natural disaster" or "affected by natural/declared disaster," depending on where you get your credit report. The AW comment code may be posted for indicating credit accounts impacted by natural disasters like Hurricane Katrina, and today some lenders are using it for the coronavirus pandemic. What's important for you to know is that this comment code alone is not considered negative by your FICO® Scores. However, other information regarding that account will still be assessed by the scores. For example, if your account is delinquent, the AW comment code won't cause the delinquency to be ignored in the calculation of your FICO Scores.
If your account was current when you entered the forbearance or deferment program, your account status should continue to be reported as "current." If this is the case, and your credit report is showing your account status as delinquent with an AW comment code, it could negatively impact your FICO Scores and you may want to contact your lender or file a dispute.
There are a handful of other comment codes that may be reported on accounts in forbearance or deferred payment status that are also not considered negative by the FICO Scores. Examples you might see include CP ("account in forbearance"), CN ("loan modified under a federal government plan") or CO ("loan modified" or "loan modified but not under a federal government plan"). As with the AW code, other information regarding that account will still be assessed by the scores when these codes are reported.
3. Check for an "AC" comment code
AC is another comment code you should look for and it represents "paying under a partial payment agreement." On your credit report you could see "paying under a partial payment agreement" or "paying under partial or modified payment agreement," depending on where you get your credit report.
While it sounds like this comment code could apply to forbearance or deferment programs due to coronavirus, it is not the right code to use for these types of programs. If you have entered into a forbearance or deferment agreement and you see the AC comment code, you may want to contact your lender or file a dispute.
The AC comment code should be used to describe situations where you have an agreed-upon repayment plan where the payments are for less than the amount specified in the original loan and not used for coronavirus relief programs. This type of comment code is considered negative by the FICO Scores and, therefore, should not be used for forbearance and deferment programs due to coronavirus.
How do I get my credit report?
Now that you know what to look for, how can you get your credit report? The Fair Credit Reporting Act (FCRA) requires each of the three credit bureaus to provide consumers with one free credit report per year. However, the three bureaus (Experian, Equifax, and TransUnion) are offering free weekly online reports until April 2021 to help consumers manage their credit during and after coronavirus.
To get your free credit reports, visit AnnualCreditReport.com.
Elizabeth is a product manager at myFICO in San Jose, CA.