(WASHINGTON, D.C.) – Congressman Jamie Raskin (MD-08) joined Congresswoman Jackie Speier (CA-14) and Congressman Michael McCaul (TX-10) in sending a letter today to Experian CEO Brian Cassian requesting the company ensures that unintentional, duplicative inquiries for an individual’s Economic Injury Disaster Loan (EIDL) application do not unduly affect their credit scores. EIDL is administered through the Small Business Administration (SBA), which uses Experian for its credit reporting purposes. The program has been a lifeline for struggling businesses during the coronavirus. However, numerous small business owners have noticed a drop in their credit scores after applying for the EIDL program multiple times because they were unsure if their initial application had registered. This bipartisan letter was signed by an additional 13 Members of Congress.
The Members wrote: “anytime an individual applies for a loan it results in a ‘hard pull’ on the applicant’s credit report, and usually drops their credit score by several points. Following a lack of communication by the Small Business Administration (SBA), many individuals submitted their EIDL application multiples times out of concern that their application did not go through. Furthermore, the creation of a new streamlined portal at the end of March required many to apply again and applicants that applied before the portal was established received two hard pulls – one for the EIDL loan and another for the EIDL advance. Many business owners accidentally applied multiple times, inadvertently aggregating hard pulls on their credit report in the process.”
Experian has an opportunity to correct this error by guaranteeing that redundant inquiries for an individual’s EIDL loan are treated as a single inquiry and that any hard pull related to an EIDL advance payment, which is really a grant, have no impact on the applicant’s credit score. These corrections should not only be applied moving forward, but also retroactively for previous EIDL applications.
The Members continued: “The importance of strong credit for long-term recovery cannot be overstated. Credit scores affect an individual’s ability to get a job, rent an apartment, own a home, and secure certain types of insurance. Households with flawed credit will have no choice but to accept higher interest rate loans that can saddle them with debt for years. Poor credit was part of the reason it took individuals so long to recover from the 2008 financial crisis. Before the coronavirus, consumer debt, not counting mortgages, had already reached a staggering $4 trillion. Now millions have lost their jobs and 82 percent of Americans indicate they’re worried about making ends meet. Given the extraordinary circumstances facing American workers and businesses, every effort should be made at this time to alleviate undue financial burden.”
The letter was also signed by Representatives Brian Fitzpatrick (PA-01), Jamie Raskin (MD-08), James P. McGovern (MA-02), André Carson (IN-07), Jimmy Panetta (CA-20), Marc Veasey (TX-33), James R. Langevin (RI-02), Jahana Hayes (CT-05), Max Rose (NY-11), Derek Kilmer (WA-06), Angie Craig (MN-02), Ami Bera, M.D. (CA-07), and Jerrold Nadler (NY-10).
A copy of the letter is available here.