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Struggling borrowers typically must make the first move to receive help from their lenders if they’re suffering financial hardship from the coronavirus pandemic, but too few make that call.
More than 90% of people who have asked their mortgage lender or credit card issuer for a break on their monthly bill have been successful, according to a new survey from LendingTree.
Far too few people, however, have asked for assistance. Nearly 1 in 5 people who didn’t ask for help with their credit card or mortgage payments said they didn’t realize they had that option, the study showed, which surveyed 1,431 consumers, including 1,387 with a credit card and 1,024 homeowners.
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Some borrowers, however, say they are having difficulty contacting their lenders due to long wait times as servicers grapple with high call volume.
Mikka Arrington is one of those people. The 46-year-old, who owns a hair salon in Cypress, Texas, waited on hold for more than four hours when attempting to contact Chase to delay her credit card payment after her business was forced to temporarily close due to the outbreak.
She was eventually told the bank was closed and to call back later. A few days later she contacted her local Chase bank and was able to receive guidance on where to seek online help for payment assistance. She successfully deferred her monthly credit card payment of $160 for three months.
The experience left Arrington confused because she received quicker assistance with Wells Fargo when suspending her mortgage payments, she says.
“Why was that so hard with Chase? If we’re all in this together, why is this information so hard to get?,” Arrington says, adding that her husband continues to work through the pandemic since he is deemed an “essential” worker as a police officer. “It just seems like they should want to help their customers more who are in jeopardy of not going back to work or those who aren’t working.”
Call your servicer
Borrowers who are struggling financially in the wake of the outbreak may have to endure long hold times, but the vast majority of Americans who take the time to reach out are getting some type of help, according to Matt Schulz, chief credit analyst at LendingTree.
“The last thing anyone wants to do is spend all of this time on hold and then be told that they can’t be helped,” Schulz says. “It may feel like pushing a boulder up a hill, but if you’re able to get in touch with your lender and request some help for a credit card or mortgage, you’re probably going to get some assistance.”
Whether you make a call, send a tweet or write up an email, take the time to contact your lender and then be persistent, Schulz says.
Lenders have so-called hardship programs that kick in after natural disasters, and the coronavirus outbreak fits that bill, he explained. These programs offer short-term help to victims of the disaster in the form of reduced interest rates, higher credit limits, waived fees or delayed reporting of late payments to credit bureaus.
Gather account documents
Be prepared with your account information and questions you want to ask. Check a lender’s website before calling to see if there is a list provided of information you may need. You may need to explain why you’re unable to make your payment and whether your financial hardship is temporary or permanent.
Keep everything in writing
Make sure you keep everything in writing that reflects the assistance provided in case there are errors on your monthly statements. Once you’re able to secure relief options, ask your servicer to provide written documentation that confirms the details of your agreement.
Monitor your credit reports
To be sure, late payments typically have the biggest negative impact on borrowers’ credit reports. A creditor can report late payments to the credit bureaus once a borrower is 30 days behind, which could remain on credit reports for up to seven years, experts warn.
Be sure to check your credit reports to make sure there are no errors. If an error has been made, you can dispute it by contacting both the credit reporting company and the company that provided the information.
“If you miss a payment, that’s a stain that’s going to remain on your credit report long after this outbreak becomes a memory,” Schulz says. “It’s really important that people don’t just sit back and do nothing or wait for someone to help. They need to make the first move when approaching their lender.”
Follow Jessica Menton on Twitter @JessicaMenton.
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