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Resilience in the face of uncertainty

Dear Colleague,

These days it seems like every day is unlike any day I’ve lived before. There used to be a cadence to what we do in business and in life but the COVID-19 pandemic has created such uncertainty and earthshattering daily news that our VantageScore family wakes up to brand new challenges every day even before the last ones have been addressed.

When the rhythm of a cadence breaks down, a major worry of mine (in a business sense) is that we begin to walk in circles. This is a mistake that none of us can afford.

And frankly, we are the lucky ones.

As I write this from my quarantine-inspired, makeshift office in my house, the news seems grim. In addition to the hundreds of thousands who are either critically ill or have devestatingly lost their lives, the latest estimates about the volume of Americans filing for unemployment benefits is 22 million – a jaw-dropping amount.

When the pandemic subsides, it is unclear how many of these hard-working Americans will be able to get their former jobs back. To state the obvious, this financial dislocation will have wide-ranging and profound impacts on the consumer lending eco-systems.

I thought I’d use my column this month to share my top priorities during this crisis:

  • Making sure our VantageScore team members and their families are safe and healthy,
  • Staying more connected with our team than ever before in our 14-year history;
  • Educating lenders and consumers about how to mitigate the impact on credit scores resulting from the financial hardships caused by the pandemic;
  • Looking ahead proactively to prevent longer term damage to the ability for lenders to extend credit to consumers;
  • Developing tools and information to help those impacted improve their financial and credit situations;
  • Have empathy.
  • Listening to everyone.

These are all important priorities, but listening to everyone is crucially important for all our leaders. These are unprecedented times and Americans are facing unprecedented hardships. We must listen to everyone and continue moving forward. Don’t let yourself get entrapped by walking in circles. Don’t lose your rhythm in both work and in life.

I often find comfort in the wise words of others, so I’ll leave you with a quote that seems relevant today:

“The only limit to our realization of tomorrow will be our doubts of today.”  Franklin D. Roosevelt

Here’s our new cadence: Staying healthy. Staying safe. Staying focused on the mission. And staying resilient.

Barrett Burns

CEO and President

VantageScore Solutions, LLC

How the CARES Act Protects Your Credit Reports and Credit Scores

By John Ulzheimer

In response to the COVID-19 pandemic the United States Congress drafted, passed and sent a bill called the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act” for short. On March 27, 2020 President Trump signed the bill into law. The CARES Act, which is several hundred pages long, temporarily amends the Fair Credit Reporting Act and will provide some limited protections for consumers as it pertains to their credit reports and credit scores.

Credit Reporting of an “Accommodation[Sec 4021 (F)(i)-(iii)]

During the pandemic, if your lender or service provider makes an alternative payment arrangement with you, formally referred to in the CARES Act as an “accommodation”, regarding one or more of your payments on an obligation AND you make your payment under that arrangement then the lender or service provider must report the account to the credit reporting companies as being current.

If that accommodation includes your payments being suspended, meaning no payment is currently due because of the pandemic, then despite you not making any payment to your lender or service provider they must still report you as being current. Simply put, if your lender or service provider makes a deal with you and allows you to skip payments or to make reduced payments, they can’t report you as being delinquent to the credit reporting companies.

NOTE: Nothing in the CARES Act requires any lender or service provider to stop reporting you as being delinquent if you already were delinquent prior to the pandemic, or to delete pre-existing delinquencies or defaults.   

Mortgage Loan Forbearance [Sec 4022 (a)(2)-(b)]

 If you have a mortgage loan that is Federally backed, meaning it’s insured or securitized by the FHA, VA, USDA, Fannie Mae or Freddie Mac, and you’re suffering financial distress because of the pandemic you can request what’s called a “forbearance.” According to the CFPB, a mortgage forbearance “is when your mortgage servicer or lender allows you to temporarily pay your mortgage at a lower payment or pause paying your mortgage. You will have to pay the payment reduction or the paused payments back later.”

Foreclosure Moratorium [Sec 4022 (c)(2)]

Unless your home is vacant or abandoned, servicers of Federally backed mortgage loans may not start foreclosure proceedings.

Student Loan Protections [Sec 3513 (a)-(d)]

If you have a Federal student loan, those that are held by the U.S. Department of Education, your payments will be suspended through September 30, 2020. Interest will not continue to accrue while your student loan payments are suspended. And, while your payments are suspended (not being made) those payments are treated as being “current” for the purposes of credit reporting.

For your protection, you may want to contact your student loan servicer just to formally request your forbearance. More information about the process can be found here, which is a page from the Department of Education website.

Best Practices

If you have a loan or a credit card, of any variety, and you know you will not be able to make your payments because of the impact of the pandemic, call your lender. Many lenders are working with their clients to suspend, modify or delay payments until some late date.  But, these programs are for people how have, in fact, been impacted. Your lender doesn’t know if you’ve been impact unless you tell them. Don’t assume you automatically qualify for any of the above-referenced programs.

The views and opinions expressed in this article are those of the author (credit expert John Ulzheimer) and not necessarily those of VantageScore Solutions, LLC.

Equifax , Experian and TransUnion Announce Free Weekly Credit Reports to Help Americans in Response to COVID-19

The Big Three U.S. Credit Reporting Agencies help Americans with more frequent access to credit histories for one year

ATLANTA and COSTA MESA, Calif. and CHICAGO, April 20, 2020

In a joint action, the three national credit reporting agencies in the United States — Equifax (NYSE: EFX), Experian (LON:EXPN) and TransUnion (NYSE:TRU) — announce they are offering free weekly credit reports to all Americans for the next year to help them protect their financial health during the sudden and unprecedented hardship caused by COVID-19.The free reports will be available via AnnualCreditReport.com starting on April 20, 2020.

The companies’ CEOs provided a joint statement on the decision to increase their offerings for the next year. “These are unprecedented times facing the world. People are feeling scared and uncertain about the future. To help play our part and reduce some of that anxiety, we are uniting as an industry to help people know the facts about their financial data. We are making credit reports more accessible more often so people can better manage their finances and take necessary steps to protect their credit standing,” said CEOs Mark W. Begor, CEO Equifax; Brian Cassin, CEO Experian; and Chris Cartwright, CEO TransUnion.

Consumer credit reports are a factual record of credit activity and payment history used by lenders, creditors, service providers and other businesses to extend financial opportunities and other offers to people. Credit reports play an important role in financial health for consumers, businesses and the economy.

Credit vigilance is critical during these uncertain times. Consumers are advised to review their credit reports frequently to understand the information that is being reported about their payment behavior. The single most important action for consumers who cannot pay their bills right now is to talk with their lenders to find out if they are offering any assistance.

The three credit reporting agencies have also worked with their U.S. trade association, Consumer Data Industry Association, to provide guidance to data furnishers on how to support consumer credit reporting during the pandemic.

For additional helpful consumer tips on navigating COVID-19, please visit:

5 Questions with Upturn’s Rod Ebrahimi

Rod Ebrahimi is the CEO of Upturn, an online tool that helps Americans understand and take actions to improve their credit. Rod  was recruited straight out of high school to Silicon Valley during the first dot-com boom where he helped build out and manage internet infrastructure for early e-commerce websites. Most recently, Rod was Co-founder and CEO of the YCombinator-backed online personal debt management company ReadyForZero. From 2011 to 2015, ReadyForZero’s award-winning personal finance tools helped Americans pay down over $350 million in personal debt. In 2015, ReadyForZero was acquired by the online lending platform Avant. At Avant, Rod was Head of Corporate Development and helped establish Avant’s west coast tech office. Rod holds a B.S., with distinction, in Cognitive Science with a specialization in Human-Computer Interaction.

1. With health and finances top of mind during this time of uncertainty and the COVID19 pandemic, how will consumer credit in the US be impacted?

As of March 27, it’s hard to know exactly how consumer credit will be impacted, but I think it’s safe to say that it’s going to be significant. The Federal government will be sending money directly to people, but my guess is that the majority of athat money for those hardest hit by the crisis will be going to the essentials like food, rent and medicine, and not to their creditors. So, I think it’s safe to assume that we may see a wave of credit defaults across all loan categories, and likely an increase in personal bankruptcies. At the same time, access to fair credit will be critical. We don’t know how individual creditors and the credit reporting bureaus will handle all this but there are some promising signs that the necessary credit will be available to individuals and businesses who need it. So far, we know that Federal tax filing extensions have been instituted and that will help free up personal cash flow and we’ve also heard that some bank and non-bank lenders are being flexible in terms of forbearance, payment terms, fees and reporting of data to the credit bureaus.  My hope and guess is that there will be significant coordination, likely based on guidelines set by Federal regulators. In the meantime, it’s important that consumers regularly check their credit reports (not just their credit scores) throughout this time to make sure the reports are accurate and reflect any new commitments from lenders or others like debt collection agencies.

2. What’s changed since we did our last interview together in 2013?

Well, in late 2018 I helped launch and serve as CEO of a new company called Upturn. It’s also a financial technology company (like my last business) but this time I created it in partnership with a global bank – BBVA. We focus on easy-to-use online tools for maintaining excellent credit. We don’t just display your credit score (though you can get a free VantageScore 3 on Upturn). Since your credit report is what ultimately determines your score – it’s the input – we want to educate consumers on what’s in there and what it all means. Then we help you identify and resolve potential errors quickly on your own. The service is free.

3. How does Upturn help consumers achieve their financial goals?

Well, most importantly we make it possible for people to fix credit report errors for free. That’s hugely significant for consumers and disruptive from a business perspective. There are a lot of people out there spending hundreds of dollars a month to pay companies to fix errors on their credit reports. That’s money that could be spent on groceries or paying down debt. We’re making it possible for people to fix errors for free, on their own. And it works. Beyond that we’re delivering people personalized financial offers from vetted partners. But I think the most important thing we’re doing in the grand scheme of things is helping people to create a habit of good credit hygiene, through our digital dispute platform.

4. How has your team adjusted to remote work during this time and how has it impacted your ability to motivate the team?

Well, thankfully we’re adjusting well. Our team members are distributed across the country and our service is 100% digital, so working from home is very much feasible and even preferred for us. That allows us to focus on helping everyone else, many of whom don’t have the luxury of being able to work from home. I can’t tell you how grateful I am to all those people – on a personal level – and I’m very much committed to doing whatever I can – both individually and as the leader of Upturn – to help protect their financial health.

5. What do you think will happen to the economy as a whole?

The exact future of the economy is uncertain. There’s no reason to mince words about it. But I fundamentally believe that we will recover from this and be stronger than ever. It may take time and there will almost certainly be mistakes. But this country is full of creative, industrious and – despite all the very understandable fear and anxiety – overwhelmingly positive and hopeful people. Things will change, but through that we will grow both as individuals and as a nation. Right now the priority for everyone is the safety and health of themselves and their families, so it’s OK to compartmentalize a bit. Focus on what’s important in the near term, and in time the economic picture will become clearer. I can tell you that Upturn is very much committed to helping find the answers – both to the big economic questions as well all the day-to-day questions about financial health people have. I couldn’t be prouder of our team – or our country. 

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