The COVID-19 crisis will damage the credit reports of tens of millions of consumers, who will see their scores nosedive because of mass unemployment and loss of income. Lower credit scores will impede consumers’ ability to get affordable credit, jobs, housing, and to generally recover when this crisis is over.
Yet the response to this looming credit reporting calamity in the March 2020 federal stimulus bill was meaningless window dressing. The credit reporting provision in Section 4021 of the stimulus bill is weaker and more deficient than even the middling current industry practice for disaster victims. Not only does the credit reporting provision do barely anything to protect consumer’s credit records from the devastating economic effects of this crisis; it may end up harming consumers more than it helps.