Coronavirus: Your credit score will be safe if you take a payment holiday

31 March 2020

Credit checking firms team up to protect customers

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Customer credit scores will be protected if they take payment holidays as a result of the coronavirus pandemic, the UK’s three big credit checking firms have announced.

Many mortgage lenders and loan providers are letting customers take breaks from payments if their finances are stretched due to coronavirus.

These missing payments look bad to credit checking firms, who could react by lowering credit scores.

But now Experian, Equifax and TransUnion have agreed an 'emergency payment freeze', meaning credit scores will not be affected during any payment holiday agreed with your bank or lender.

How will the payment freeze work?

The emergency payment freeze will apply to all loan agreements, including mortgages. 

If your lender agrees to a payment holiday, your credit score will not be harmed while your repayments are paused. 

For example, if you were up to date with your payments before the freeze began, your account will continue to show up as up to date until the holiday finished. 

If you were already behind with payments, your arrears before the freeze began will continue until it ends. 

All lenders use at least one of the big three credit checking firms so there is no risk of your payment holiday not being picked up.

What happens if you fall behind without an agreed payment holiday in place?

Falling behind on repayments without having an agreed payment holiday with your lender will harm your credit score. 

Jonathan Westley, of Experian, says: “If you’re worried about meeting regular payments because of the pandemic, it is crucial that you speak to your lenders and other providers as soon as possible so they can help.

“Many lenders are offering payment holidays or other arrangements to help people who have been affected by the outbreak."

Credit scores will continue to be affected by all other normal factors, such as credit card debt, during the coronavirus outbreak.

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