With the government back up and running, if only temporary, there is an overwhelming sense of relief. However, for the 800,000 federal employees who were affected by the government shutdown, there are still some lingering questions:
How will the government shutdown impact my credit? If you were were able to pay all your bills on time, nothing will really be changed. However, we understand this is not always the case, and missing a paycheck for any employee can be a difficult hurdle. There are also options for Federal Contractors also! Here's what to do depending on your situation. In addition, many folks did not receive bill notifications and they typically rely on these paper notices as payment reminders.
A) You are not yet 30 days late on a payment
It is important to remember that a payment will not mark a strike against your credit unless you are 30 days late. Calling up your creditor and explaining the situation may be enough for them to make special consideration - even waiving late fees and extending payment relief options. Many large companies have already put protocols in place to deal with this situation. Creditors don't always know which customer is considered an "essential" government employee or "non-essential" because creditors are not privy to this data, it is important to reach out and explain you are furloughed to your creditors to be proactive before any late payment may negatively impact your credit.
B) You are now 30+ days late on a payment Without reaching out to your creditors, your credit report will now (or will soon) reflect a 30 day late payment. It is still important that you reach out to your creditors to explain the situation. Like the folks in A), there are protocols now in place at most major companies to assist you and they will not know you are a furloughed government employee unless you let them know. A recent 30 day late can be incredibly damaging to your credit:
A recent 30 day late can drop your credit score as much as 100pts.
It is the single most valuable indicator to a new creditor not to extend credit as it shows you are currently behind on your debt obligation.
A late payment after a bankruptcy can be the proverbial "nail in the coffin" creating a narrative that the borrower is going back to their old ways.
What are the creditors doing to help? (Click the creditor to go directly to reference site)
Alpine Bank: 0% loan up to 6 months after shutdown up to $8,500.
American Express (AMEX): Website is advertising assistance on banner. Call the number on the back of your credit card.
Capital One (CapOne): Call 1-877-383-4802 (general number)
Chase Bank: Call 1-888-356-0023.
Citi: Different Department Numbers. Citi Cards: 1-800-950-5114 Citibank: 1-888-248-4226 CitiMortgage: 1-877-211-3758
Citizens Bank: Call 800-922-9999 or visit a branch.
Democracy Federal Credit Union: Offering 0% interest short-term relief loans up to 6 months for some customers Deferment of some existing loans up to 90 days Call 800.742.5582
FedChoice Federal Credit Union: Offer shutdown loan options Additional "Skip-a-pay" Call 800.969.6151
Navy Federal Credit Union: Offering 0% loan up to $6,000 for some customers Call 1-888-842-6328
PNC: Call 1-888-762-2265
USAA: Low interest rate loans available Call 800-531-USAA (8722)
U.S. Bank: Low rate "quick loan" options available Call 877.760.6046.
Veridian Credit Union: 0% loans up to $3,000 Call (800) 235-3228
Wells Fargo: Automatically reverse late fees Waive overdraft fees Foreclosure proceedings placed on hold Call 800-219-9739
If you don't see your specific creditor listed, do not worry, many of them are offering assistance regardless. As long as you can track down a phone number. What should you do if your creditors do not assist in removing late payments?
Unfortunately, if they choose to report the late payment as a matter of policy, they may have a legitimate case to keep a late payment on your credit report even if it was a direct result of the government shutdown. Loan Ready Credit is offering a free credit analysis, and one free month of credit restoration for those federal employees and federal contractors who have derogatory remarks on their credit as a result of the shutdown. We will complete a free credit analysis to determine what may be done about correcting any errors on a credit report that resulted from the shutdown. Call 720.892.6042 for a free analysis, and mention that you are a furloughed employee.