Dear Suze Orman, Credit Bureaus Must Not Only Freeze, They Must Reset
The time for freezing is now, but resetting is key to economic recovery once the pandemic becomes manageable.
Suze,
I was watching MSNBC earlier today, 3/9/2020.
You had mentioned that credit bureaus should immediately freeze until the crisis has passed.
While I agree with you in theory, you’re not going far enough.
Today, the U.S. death toll surpassed 80,000. By the end of next weekend, based on current trends, we should surpass 95,000 dead.
Those morbid considerations aside, your idea does not go far enough as it appears you are not taking into consideration time passed since the beginning of the pandemic, time that has already deleteriously impacted many of our credit scores.
From there, for every new day that passes, the uptick in deaths will mirror a further increase in business closures and unemployment claims … as many of us have suffered since January or February.
What this means is the country that far too many of its citizens are racing to reopen, as we are bereft of any sense of security in doing so, will take a continued hit. Our credit scores will continue to decline.
You are advising to freeze a process that began months ago. Damage has already been substantial.
Freezing and then unfreezing an already damaged credit report helps who, exactly?
Equifax, Experian and Trans-Union need to reset. Everyone begins with either an auto-increase based on where one was prior to the pandemic, and they remain at the higher number if their prior was lower. Or, everyone begins with a 700 score, which will help those with bad credit and, yes, slightly penalize those who had maintained scores in the 800s. Once unfrozen, however, those who had previously attained the higher scores can quickly build up again, while those who have been irresponsible with their credit will drop as before.
But this second option particularly levels the playing field, and grants everyone new opportunity.
None of this is a perfect solution, especially as nothing of our imminent future is certain.
But freezing under any consideration can only be half the equation. Resetting with one of the two options as listed above is, to my mind, necessary for a true economic recovery.
Whenever that may happen.
Thank you for reading.
Best,
Joel Eisenberg
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