COVID-19 Credit Reporting Relief Act
Purpose:
This legislation mandates the removal of all negatively reported credit history entries for all individuals in the United States during the period from January 31, 2020, to May 11, 2023. It prohibits the reporting of negative credit information from that period, including by debt collectors who purchased such debts, without forgiving the underlying debts or altering existing debt collection laws.
Key Provisions:
The relief applies to the period beginning January 31, 2020, and ending May 11, 2023. Credit reporting agencies are required to expunge all negative credit entries reported during this specified period for every individual, regardless of specific hardship.
The legislation clarifies that it does not forgive or cancel any debts incurred during the specified period. Individuals remain responsible for fulfilling their financial obligations. Existing debt collection laws and regulations remain in full effect; creditors and debt collectors retain the right to pursue legitimate debt collection activities as permitted by law.
Creditors and original lenders are prohibited from reporting any negative credit information related to the specified period. Additionally, debt collectors and entities that have purchased debts originating from the specified period are prohibited from reporting any negative credit information related to those debts on individuals’ credit reports.
Credit reporting agencies must complete the removal of applicable negative entries within 90 days of the enactment of this legislation. A nationwide public awareness campaign will be initiated to inform all individuals about their rights under this legislation and how it affects their credit reports, emphasizing that debt obligations remain unchanged.
Valid Reasons for Universal Removal Without Debt Forgiveness:
Adjusting credit reporting practices acknowledges the extraordinary circumstances of the pandemic without interfering with contractual debt agreements. By prohibiting debt collectors who purchased debts from reporting negative information, the legislation prevents additional harm to consumers who might otherwise suffer repeated negative reporting for the same debt.
Respecting existing debt collection laws while adjusting credit reporting ensures legal obligations are met without imposing undue hardship through damaged credit histories. A universal prohibition on negative reporting simplifies implementation and enforcement, avoiding complexities associated with tracking debt sales and transfers.
Improving credit histories helps individuals access better financial opportunities as they work to repay existing debts, aiding in overall economic recovery.
Benefits to Individuals’ Financial Wellbeing:
Removal of negative entries improves credit scores, enabling access to credit on favorable terms during financial recovery. Better credit histories assist in securing housing and employment, as credit reports are often reviewed by landlords and employers.
Prohibiting debt collectors who purchased debts from reporting negatively prevents additional credit damage from secondary debt markets. Improved credit reports encourage participation in mainstream financial services, reducing reliance on high-cost lending options. Relief from negative credit reporting reduces stress and anxiety associated with financial difficulties, contributing to overall wellbeing.
Conclusion:
The COVID-19 Credit Reporting Relief Act provides a balanced and inclusive solution to the widespread financial impact of the pandemic. By prohibiting negative credit reporting during the period from January 31, 2020, to May 11, 2023—including by debt collectors who have purchased such debts—it supports individual financial recovery while respecting existing debt obligations and collection laws. This legislation promotes fairness, simplifies credit reporting practices, and facilitates a stronger economic rebound by empowering all citizens to rebuild their financial lives without the burden of pandemic-related credit issues.