February 4, 2019
Orion’s experienced brokers know that, despite the partial shutdown ending (possibly temporarily), a negative impact on borrower’s credit ratings may be yet an additional worry. Any change to credit depends on whether a payment is missed, such as a mortgage, rent, credit card or car loan payment and how late that payment is.
One late payment most likely won't significantly impact one’s credit if your client’s credit history is in good standing. It may not appear on the credit report at all. Lenders don't typically report late payments to the three credit bureaus (Experian, TransUnion, and Equifax) unless payments are 30 days or more past due. Typically late fees won't show up on a credit report.
Contacting the credit bureaus directly will not help as the bureaus do not know which workers are furloughed, or if a consumer is impacted by the shutdown. They receive payment information from lenders (or data furnishers), which are free to decide how or whether they will report late payments. (The one exception is servicers of federal student loans, which are required to report late payments to the credit bureaus.)
With that said, Orion’s brokers who have federal employees as clients may be telling them, “If you’re at risk of missing a mortgage, rent, car loan or any other type of bill payment, your first step should be to contact your lender.” Many banks and credit unions that work with federal employees are offering financial help for their customers affected by the government shutdown. That help might include low or no-interest advances on paycheck, loans for employees who are running out of reserved savings, forbearance, payment assistance programs, due date extensions, waivers, repayment plans, loan modifications etc.
The bottom line is, if you haven’t already done so, tell your clients to contact your lenders and creditors. There were assistance programs to Federal employees who were affected by the shutdown. Also, your clients should ask creditors if they have recommendations or information regarding any other program that may be useful as well.