What Is DEFERMENT PLAN and How Does It Work?
Due to the current pandemic, many lenders and creditors have begun offering deferment plans to borrows to "ease" the financial stress. Before considering ANY deferment plan it is important to understand how any forbearance or deferments can affect your overall credit because everything does come at a price. Don't agree to any deferment plans without knowing its overall effect on you.
Ask the right questions & get the right information
According to the FCRA, The cares act allows lenders as well as banking institutions to make certain accommodations on whether or not to report deferments but it is solely up to the lender's discretion. Make sure you contact your creditors or lenders and confirm whether your adjusted deferment will continue to be reported to the credit bureau. Every creditor will go about forgiving payments and reporting to the bureau differently so that's why you should really take the time to call each creditor before committing to any adjusted plan.
It would be inconvenient if you agreed to payment deferment and your creditor decided to continue to report to the bureau as usual and now the bureau will conclude that you have been delinquent on your payments. Your credit would drastically take a toll if this occurred. That's why payment plans are offered but at your own expense.
Why are you considering a payment plan?
You may be trying to take advantage of a deferment plan simply because it was offered to you by your lender OR you may be in need of a deferment because you may have lost your job and are now financially overwhelmed with all of your payment now that you are not generating the same income. Even if you are offered forbearance for those deferred payments it may still have an effect on your credit. So despite your reasoning behind considering any deferments just make sure you weigh the costs associated with it and entirely understand its overall impact.
Turn to a trusted agent or lender
Considering that we were placed under a state of emergency, the extreme circumstances allowed lenders to take full control of their very own deferment or forbearance plans they offered to borrowers in need. In many of these borrower protection plans the borrower may not even be required to pay the money back in full, however, the lender doesn't benefit from revealing that information to their borrowers. If you don't have a strong and trusting relationship with an agent that works with your lender to keep you completed informed and up to date with the terms and agreements of your deferment plan, then at least make sure you take initiative and do your research. You want to make sure you are borrowing from transparent lenders that you can trust and really have your best interest at heart.
To ensure that you don't become a victim to sneaky lenders that don't put their borrower's interest first, it is essential that you understand your finances and how to properly utilize your credit. At Credit Agent Plus we have informational courses such as; Personal Finance 101 & The Smart Credit Course, that can help you learn how to maneuver the credit world wisely and come out on the other end as a winner. Lenders currently have the advantage because they are the key players in the credit world, but with the right training through Credit Agent Plus, you can learn enough information about credit power to never need a lender in the future again. Strive to be in a position where you dictate when you get approved and what lenders you deny; with Credit Agent Plus and a little determination, you can reach that position in no time.
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