When a lender agrees to temporarily postpone a consumer’s regular payments, whether due to hardship, disaster, or a payment assistance program, the account must be reported with care to ensure the information is clear, accurate, and fully compliant with the Fair Credit Reporting Act (FCRA). Postponed payments are not delinquencies if the postponement is authorized, and improper reporting may result in consumer disputes or regulatory scrutiny.
When Does Postponement Apply?
Temporary postponement of payments can result from:
- Natural or declared disasters (e.g., hurricanes, pandemics)
- Financial hardship (e.g., job loss or medical emergency)
- Participation in lender-sponsored assistance programs
- Short-term payment arrangements such as forbearance or deferral
These scenarios do not eliminate the obligation to repay but offer the borrower breathing room during challenging times.
Options for Reporting Temporarily Postponed Accounts
1. Maintain the Account’s Status as Current (If Applicable)
If the consumer was current at the time payments were postponed and remains in compliance with the terms of the agreement, the account should continue to be reported as “Current.”
This prevents negative scoring impact and reflects that the consumer is following the lender’s terms.
2. Use Appropriate Special Comment Codes
To ensure transparency, use Special Comment Codes to describe the account’s condition. Examples include:
- AW – Affected by natural or declared disaster
- CP – Account in forbearance
- CN – Loan modified under a federal government plan
- D1 – Payment deferred
These codes alert credit bureaus and lenders to the nature of the delay without misrepresenting the consumer’s payment behavior.
3. Do Not Report Late Payments During the Postponement Period
As long as the borrower is in compliance with the terms of the arrangement (even if no payment is due), the account should not be reported as delinquent.
Other Reporting Considerations
- Payment History: Continue to reflect accurate historical payment behavior up to the point of postponement.
- Scheduled Monthly Payment Amount: You may set this to zero during a temporary suspension period if no payment is due.
- Balance: Continue reporting the current balance, even if no payment is due for a set time.
- Date of First Delinquency (DOFD): Do not alter the DOFD unless the account becomes delinquent outside of the agreed postponement.
FCRA Compliance Requirements
Under the FCRA, furnishers are required to report:
- Accurate payment status and use proper comment codes
- Complete account data, including balance and history
- Timely updates to reflect the most recent status of the account
Failure to properly report postponement agreements may mislead future lenders or result in incorrect scoring.
Impact on the Consumer’s Credit Report
- Preserves Credit Standing
Properly reported postponements ensure the consumer’s credit score is not unfairly penalized during a hardship period. - Lender Transparency
Accurate status and comments give future lenders the full context behind gaps in payment activity, supporting informed credit decisions.
Conclusion
Temporarily postponed payments must be reported with care and precision. By maintaining a “current” account status, applying appropriate Special Comment Codes, and accurately preserving historical data, furnishers fulfill their FCRA obligations while protecting consumers from unjust credit damage. Transparent reporting also ensures that lenders reviewing the credit file have the context needed to evaluate risk fairly.