How to Tackle Unjust Credit Score Impact from Coronavirus Forbearance

Updated on March 12, 2024

At a Glance

  • Explore coronavirus forbearance programs for financial relief during the pandemic.
  • Understand the unexpected impact on credit scores and the challenges it presents.
  • Navigate and repair post-pandemic credit challenges with strategic approaches.
  • Consider expert guidance to effectively rectify credit issues and regain financial stability.

Amid the financial upheavals of the pandemic, coronavirus forbearance programs emerged as a beacon of hope for many borrowers. Designed to offer relief, these provisions promised to protect financial well-being. Yet, an unexpected fallout looms for many: dented credit scores.

Why, despite availing forbearance, are individuals finding their credit health compromised? And if you’re among them, how do you navigate and rectify this situation?

Join us as we unravel the complexities of the forbearance credit conundrum and outline a blueprint for post-pandemic credit repair. Whether you’re seeking clarity or solutions, this guide is here to help.

Coronavirus Forbearance Credit Relief: What’s the Story?

You might be wondering what hit your credit score despite all the financial support that’s supposed to be provided during these tough times. To understand this, we must learn what the COVID credit relief is all about. 

Even though borrowers had been granted forbearance due to the economic havoc caused by the pandemic, some credit reporting agencies weren’t so forgiving. They may have marked your accounts as in forbearance, which, in turn, negatively impacted your credit score.

But don’t worry, there are a few things you can do to set things right for you and your credit score. But first, let’s understand the intricacies of this coronavirus forbearance credit relief situation. 

What is Forbearance?

In the context of credit relief, forbearance refers to the temporary suspension or reduction of loan payments. It is a measure to provide financial relief to individuals and businesses facing financial hardships during the pandemic.

However, while forbearance may provide immediate relief from the burden of monthly payments, it is essential to understand its potential impact on your credit score. Credit reporting agencies play a crucial role in determining your creditworthiness, and any negative marks on your credit report can have long-term consequences.

Did Everyone Accept and Abide by the Forbearance Policy?

The short answer is no. During the forbearance period, some credit reporting agencies may have chosen to label your accounts as in forbearance. This label, though reflecting the temporary relief you were receiving, could have been perceived negatively by lenders and financial institutions. They may have interpreted it as an inability to meet your financial obligations, potentially affecting your future borrowing capacity.

Not all credit reporting agencies handled forbearance reporting in the same way. While some may have marked your accounts as in forbearance, others not have. This inconsistency in reporting practices further complicated the situation, leaving borrowers uncertain about the impact on their credit scores.

How Can You Combat the Negative Credit Impact of Coronavirus Forbearance?

A negative credit score can make things go south more often, and nobody wants that, right? If your credit score has been on the receiving end of the coronavirus forbearance, you may wish to combat it as soon as possible. 

Here’s how you can effectively combat the negative impact of coronavirus forbearance on your credit score:

1. Check your Credit Report

Step one is to gather all the necessary intel. Pull up your credit report and see what’s going on. Look for any negative marks and make a note of them. Remember, knowledge is power, and in this case, it’s the first step toward getting your credit score back in tip-top shape.

Now, you might be wondering how you can get your hands on that oh-so-important credit report. Good news! Under the Fair Credit Reporting Act, you’re entitled to a free copy of your credit report from each major credit reporting agency once a year. So, go ahead and request those reports. It’s simple; you can do it online or by phone.

Once you’ve got your report in front of you, it’s time to analyze. Look out for errors or discrepancies that might be dragging your credit score down. If you spot anything fishy, take note of it and prepare to fight it like a brave credit warrior.

2. Call Your Servicer or Lender

Now that you’ve armed yourself with knowledge, it is time to reach out for the big guns. Pick up the phone and give your servicer or lender a call. Let them know about the unfair negative impact forbearance is having on your credit score.

Explain the situation calmly and firmly. Let them know that you’ve been diligently abiding by the rules of forbearance, and it’s just not fair that your credit score is taking a hit. Who knows, they might have a solution to fix the situation. 

3. Monitor Your Credit

Just like a superhero keeps an eye on the city, you need to keep a vigilant eye on your credit. After all, these things can sneak up on you when you least expect it. So, consider regularly monitoring your credit to catch any unexpected changes.

There are many credit monitoring services available that can alert you of any changes in your credit score or reports. You’ll be the first to know if any fishy business is going on. And don’t worry, it’s not as complicated as it sounds. Sign up for one of these services, sit back, and let them keep an eye out for you. It’s like having your personal credit assistant.

What to Do if Your Credit Score Drops Despite Coronavirus Forbearance?

During the COVID-19 pandemic, people turned to forbearance for financial relief, hoping to weather the storm unscathed. However, instead of getting relief, many experienced the winds of credit score woes blow against the force despite their best effort.

If that sounds like you, don’t worry. There is still a way out to an improved credit score.

1. Review Your Budget and Financial Situation

If your credit score has taken a hit, it’s time to go back to the basics and review your financial situation. Take a deep breath, grab a cup of coffee, and study your budget like it’s a thesis.

Look for any areas where you can cut back and save extra bucks. It could be packing your own lunch or finding a more affordable streaming service. Every little bit counts, my friend. By making small changes, you can start building a stronger financial foundation.

2. Make Timely Payments

When it comes to credit scores, there’s one golden rule: always pay your bills on time. Late payments can seriously damage your score, especially if it becomes a habit. So, set up reminders, automate payments, and do whatever you need to do to make sure those payments are never late again.

And don’t forget, your credit score is like a beautiful garden. It takes time to grow and flourish. So, be patient and consistent with those payments. Your future self will thank you!

3. Establish a New Positive Credit History.

Sometimes, a fresh start is just what the credit doctor ordered. If your credit score has taken a nosedive, it might be time to establish some shiny new credit history.

Consider opening a new credit card, but use it wisely. Make small purchases and pay them off in full every month. This shows lenders you’re responsible and can handle credit like a pro. Plus, it’s a great way to build up that credit score and FICO muscle!

4. Leverage a Credit Builder Loan

A credit builder loan can be a game-changer for those wanting to mend their credit health. Unlike traditional loans, these are primarily designed to help individuals build or rebuild their credit scores.

How to Use a Private Credit Builder Loan to Boost Your Credit

Post-forbearance credit repair can feel daunting. Enter the Private Credit Builder Loan—a crucial tool for those rebounding from deferment periods. Here’s how to leverage it effectively:

  • Research Thoroughly: In the aftermath of forbearance, selecting the right credit builder loan is paramount. Opt for reputable private lenders, comparing their terms, fees, and interest rates.
  • Commit to Consistency: Once the loan is in place, your dedication to punctual payments becomes the backbone of your credit revival. Timely repayments signal creditworthiness and help to rebuild trust.
  • Track Your Growth: Keep an eye on your credit report, noting improvements and ensuring that all your loan payments are duly reflected.
  • Exercise Restraint: If the loan provides a usable limit, spend minimally. Excessive utilization can counteract your credit-rebuilding efforts.
  • Balance Your Credit: While focusing on your credit builder loan, manage other credit lines judiciously. A well-balanced credit profile aids in recovery.
  • Conclude Thoughtfully: Upon complete repayment, verify that your loan status reflects as “closed” or “paid in full”. This becomes a testament to potential lenders of your rebound from forbearance.

Harnessing a credit builder loan post-forbearance can be transformative, steering you towards a renewed financial trajectory.

Best Private Credit Builder Loans

If you think a credit builder loan is the best option for you (and it is for many), then you want to make sure you work with the best lenders. Figuring out which lenders have the best rates and terms can be daunting, so we did it so you don’t have to.

Here are our picks for the best private credit builder loans for repairing credit after forbearance: 


Upstart offers loans between $1,000 and $50,000, featuring APRs from 4.60% to 35.99%. Their loan terms range from 36 to 60 months, with no strict minimum credit score requirement. 

Upstart Personal Loan

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score


Fixed APR


Variable APR



  • Minimum credit score: None.
  • Fixed APR: 4.60-35.99%.
  • Loan amounts: $1,000-$50,000.
  • Repayment: 3 or 5 years.


  • Hold U.S. citizenship or possess permanent residency.
  • Be a minimum of 18 years old in the majority of states.
  • Provide a valid email address and Social Security number.
  • Be currently employed full-time or starting a full-time job within the next six months.
  • Maintain an active bank account with a recognizable routing number.
  • Not have declared bankruptcy in the past year.
  • Ensure no delinquencies are present on their current credit reports.
  • Record fewer than six hard credit inquiries in the past six months, excluding inquiries for student, auto, or mortgage loans.


  • Welcomes first-time credit users.
  • Provides quick fund disbursement.
  • Allows flexibility in adjusting payment due dates.
  • Offers pre-qualification through a soft credit inquiry.
  • Customer support available seven days a week.


  • Origination fee may apply.
  • Does not offer joint, co-signed, or secured loan options.
  • Lacks a mobile application for loan management.
  • Limited to two loan repayment terms.


Upgrade offers loans ranging from $1,000 to $50,000 with APRs between 8.49% and 35.99%. They provide flexible terms of 24 to 48 months and require a minimum credit score of 600.

Upgrade Personal Loan

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score


Fixed APR

8.49% - 35.99%

Variable APR



  • Minimum credit score: 560
  • Fixed APR: 8.49% – 35.99%
  • Loan amounts: $1,000 to $50,000
  • Repayment: 3 to 5 years (7 years on some larger loans)


  • Possess an active bank account.
  • Able to provide a legitimate email address.
  • Minimum age requirement: 18 years (19 for Alabama residents).
  • Credit score of 600 or higher.
  • Annual income of $25,000 or more.


  • Willing to accommodate borrowers with a credit score as low as 560.
  • Offers flexibility with a range of loan amounts from $1,000 to $50,000. This can be suitable for both small and large financial needs.
  • Provides options for repayment, allowing borrowers to choose a timeline that best suits their financial situation.
  • Once approved, borrowers can access funds in just one day, which is useful for urgent financial needs.


  • Origination fees can go as high as 9.99%, which might add a significant cost to the loan.
  • Apart from the origination fee, there are fees for late payments and failed payments, which can add up if one is not careful.
  • While there is an option to extend repayment for larger loans up to 7 years, it’s not standard for all loan amounts.


Lending Club provides loans from $1,000 to $40,000 with APRs spanning from 9.57% to 35.99%. Loan terms vary from 36 to 60 months, with no minimum credit score requirement.

LendingClub Personal Loan

Stilt’s lender ratings reflect the findings and opinions of our editorial staff. Our scoring methodologies consider a wide array of factors and data points for every lender, offering, and financial solution.
Min. credit score


Fixed APR


Variable APR



  • Minimum credit score: 600.
  • Fixed APR: 9.57-35.99%.
  • Loan amounts: $1,000-$40,000.
  • Repayment: 3 or 5 years.


  • Reside in the U.S. as a citizen, permanent resident, or holder of a valid visa.
  • Be a minimum of 18 years of age in most states.
  • Possess a bank account that can be verified.
  • Required minimum FICO 8 or VantageScore 2.0 credit score: 600. A proprietary scoring system is also in use.
  • Necessary minimum credit history: 3 years and at least two active accounts.
  • Debt-to-income ratio cap: 40%, applicable to both individual and joint loan applications.
  • Annual income prerequisites: None specified, but proof of income is mandatory.


  • Option for joint loans.
  • Debt consolidation loans paid directly to creditors.
  • Soft credit check available for pre-qualification.
  • Flexibility to modify payment due date.
  • Quick fund disbursement.


  • Fee for loan origination.
  • Lack of a mobile app for loan management.
  • Restricted range of loan term durations.

Final Thoughts

Remember, Rome wasn’t built in a day, and neither is a stellar credit score. It takes time and effort. But with the right strategies and a sprinkle of determination, you can get back on track and slay that credit score dragon!

You have the power to fight back and overcome any unfair credit challenges caused by the coronavirus forbearance. Your credit score will rise like a phoenix from the ashes, and you’ll be back on the road to financial success. So, don your credit warrior cape, and let’s get to work!

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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