(WSVN) - The coronavirus hit, people were laid off and couldn’t pay their bills. Now, many people are finding the damage done to their credit scores. Plus, the president promised a break to people with their student loans. Help Me Howard with Patrick Fraser has more on all this.
Every parent would love to be able to do what Stephanie Henry did, which is to help her daughter open her own business.
Stephanie Henry: “I was able to help by me co-signing, they were able to receive the loan. The loan amount was $16,000.”
Bridgitt was repaying the loan from the Lending Club every month.
Then the virus hit, and she was late with the March payment.
Stephanie Henry: “I did not know this. She didn’t want me to be more upset. My mother, for instance, was in the hospital with COVID-19.”
When Stephanie found out, she made two payments to catch up.
But the damage was already done to her and her daughter’s credit scores.
Stephanie Henry: “She understood that it would be reported late for her. She did not understand that it would also affect me.”
That one late payment dropped Stephanie’s excellent credit score from 830 to 720.
Stephanie then contacted the Lending Club and asked for a one-time adjustment to restore her credit score.
Stephanie Henry: “They can retract that late payment. Companies have that option, and I asked them, and they said no.”
Stephanie was surprised, knowing so many Americans are struggling with their bills, and the last thing they need is their credit rating to be devastated over a late payment.
Stephanie Henry: “So people are not only dealing with maybe health issues, economic issues, but now their credit is being sorely affected.”
Well, Howard, is Stephanie entitled to get a one-time break, especially because of the coronavirus nightmare?
Howard Finkelstein, 7News legal expert: “Legally, no. Even if you are days late on a payment, the lender can report you to the credit bureau, but they do not have to report you, and they have the power to retract the late notification, and they can do that to the borrower and the person who co-signs.”
Juliet has a loan headache as well. A $39,000 college loan she took out to become a schoolteacher.
Juliet Gray-Williams: “I love it. Twenty years-plus. I love making a difference in the little ones’ lives.”
What she would also love is to get a break on her student loan and thought she was going to when the president spoke.
President Trump: “Student loan payments have been waived for six months.”
Even though Juliet was lucky enough to still get paid as a school teacher, she was excited to get that break.
Juliet Gray-Williams: “The light bill is higher, the water bill is higher, the grocery bills are higher.”
She contacted her lender and asked to be able to stop payments on her $39,000 student loan for six months.
Their answer? No.
Juliet Gray-Williams: “I am so disheartened. A lot of other teachers, I’m sure, are stressing out about student loans.”
Juliet was told she didn’t qualify for the president’s break on student loans.
Or, does she, Howard?
Howard Finkelstein: “No. The Cares Act only covers federally backed student loans. Juliette has a private loan, and it’s up to the service provider to give her the break the government wanted, and they chose not to.”
Juliet Gray-Williams: “I don’t even see me finishing off paying this loan until I die.”
But after 7News spoke to the Lending Club, they changed their mind about Stephanie.
Stephanie Henry: “They told me that they were going to remove the late payment and there would be no negative reports on my credit.”
With her credit straightened out, Stephanie can take the next step on her life and buy her own home.
Stephanie Henry: “I’m so elated. I’m so happy. I feel like it’s my birthday or Christmas. That’s how happy I am.”
A lot of people are late or going to be late on their bills because of the coronavirus.
Call the company you owe money, and let them know you intend to pay and try to work out a plan with them.
That way, they hopefully will not report you to the credit bureaus or they might remove the late payment notification.
If they won’t, write a letter to the credit bureaus explaining how the coronavirus caused your late payments.
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