For tens of millions of Americans thrown out of work in the Covid-19 economic shutdown, it's not clear where money to pay the rent or the mortgage, the electric bill or the car loan will come from. While the stimulus checks and expanded unemployment benefits Congress has offered so far are a lifeline for struggling families, these measures are not enough to address the ongoing shock to household finances. As they continue to comply with stay-at-home orders that are vital to public health, families across the country find themselves falling behind on bills, putting groceries on credit cards or turning to payday and other lenders. [...]
At a time of widespread financial upheaval, it's time to think bigger: Since credit reporting determines access to economic opportunity for every American household, it should be treated as a public utility. Private credit reporting companies should be replaced by a publicly run credit registry that operates in the public interest and that automatically corrects for events like natural disasters and global health crises.
By changing how credit flaws like overdue medical debt or missed bills accumulated during the Covid-19 emergency are reflected on credit reports and scores, a public credit registry would ensure that consumers are not penalized for events that are beyond their control, and that do not accurately reflect their likelihood to repay a future loan.