News & Trends

How to Protect Your Credit Score During the Government Shutdown

If you are one of the estimated 800,000 federal government employees or 1.4 million federal contractors who were impacted by the government shutdown. There is a chance your credit score could be affected if your lender reports that you missed a payment, such as for a mortgage, auto loan or credit card loan. Many federal workers didn't receive a paycheck for more than a month, and it may have been challenging for some to pay their bills on time.

What You Can Do Now

If you are a federal employee or contractor and missed a payment, your first and most important step is to contact your lender immediately and let them know your circumstance. Several lenders have announced they have made options available to impacted employees. Do not wait until you are contacted by your lender. Be proactive.

What If I Pay My Bill Late or Miss a Payment?

A payment that is less than 30-days late most likely will not appear on your credit report at all. You should discuss with your lender whether there is a late fee applicable to a late payment. A late payment of 30 days or more may be reported after an entire 30-day billing cycle.

How Do Credit Bureaus Handle Shutdowns?

Credit bureaus don't have knowledge of whether a specific consumer was furloughed by the government shutdown. The lender, or credit data furnisher, is in control of reporting accounts on its customers. Many lenders are offering financial help to their customers during the government shutdown.

Experian can offer some help. We offer all consumers, including those impacted by the shutdown access to a free credit report, refreshed monthly, with basic credit monitoring that will alert you if your lender reports a missed payment. Note that this service is free and no credit card information will be requested from you.

You may also choose to exercise your right to obtain a free credit report from Experian, Equifax and TransUnion at the following website:

Experian consumer assistance representatives can provide you with contact information for your lender. If a late payment appears on your credit report because you missed a payment while on furlough, Experian representatives can help you place a personal statement on your credit report explaining that the payment was late because you were on furlough.

Finally, Experian has worked with The Consumer Data Industry Association, the national trade association for credit bureaus, to issue guidance to lenders suggesting late payments be reported as "deferred" or in "forbearance," but it is the lender's business decision to decide what action to take. Lenders can find more information at the CDIA website.

Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.

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