Compliance Q&A: COVID-19 and Coding Forbearance

Q: If our customer is on a COVID-19-related forbearance plan (and she was current before the bank agreed to the plan), do we use special comment code AW (affected by natural or declared disaster) and code CP (account in forbearance) and will either affect her credit score?

A: The bank may report AW or CP if it chooses, but our understanding is that this would not affect the credit score and would only provide additional insight as to the valid reason for the deferment. The CDIA also reflects this in its FAQs here:

If I report using the recommended FAQ 58 or FAQ 45 guidance and report Special Comment AW or CP, how will the consumers’ credit scores be affected?

The country’s leading score developers, VantageScore and FICO note that forbearance and deferred payment scenarios have a neutral impact on a consumer’s credit score so consumers in one of these programs, as reported to the nationwide credit bureaus, should have no negative impact as a result of Coronavirus. FICO noted that “the placement and reporting of an account in forbearance or a deferred payment plan in and of itself does not negatively impact a FICO(r) Score.” VantageScore makes clear that “[a] loan placed in a deferred payment or forbearance plan will not result in a negative impact.” The same is true for a natural disaster coding: “[t]he net impact is that a consumer’s VantageScore credit score will not go down, either because negative information is neutralized because of the natural disaster…”
Page 13’s+Affected+by+Natural+or+Declared+Disasters.pdf

In addition, our CARES Act Credit Reporting Summary also provides additional detail here:


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