Is Deferring Payments During The Pandemic Affecting Your Credit Score?
TORONTO – During the COVID-19 pandemic, more than three million Canadians took advantage of deferred payments to fix financial problems.
According to Equifax, last year there were 900,000 deferred mortgages and 1.2 million deferred credit card payments.
These deferral programs have ended and payments are now back on track.
Deferred payments aren’t supposed to impact your credit rating or score, but it could if a lender records a payment as missed or late instead of deferred.
Equifax Canada said it has worked with lenders to implement reporting guidelines to ensure payments are not reported late.
“They were reporting them as paid as agreed, because that’s technically what they were. The lender had made an agreement with the consumer that it was okay not to make a payment for a period of time, ”said Julie Kuzmic, director of consumer advocacy at Equifax Canada.
There were no widespread problems, but it is possible that some lenders mistakenly reported a deferred payment as overdue.
If so, one mistake can have a lasting impact on your credit rating and score.
“Even a small mistake on your credit report can have a huge impact on your credit score and in terms of trying to get credit cards, a mortgage or even a student loan it can mean the difference between getting a good rate, a bad rate, or no loan at all, ”said Lisa Gill of Consumer Reports.
Unfortunately, errors on credit reports were happening even before the pandemic, which is why it’s important to check your credit report at least once a year or if you plan to apply for credit.
Equifax now allows you to check your credit rating and score online for free.
If you find an error, you must take steps to correct it immediately.
“If anyone sees something that doesn’t look right, there is a lot of information on our website on how to find these deferred payments on your credit report to make sure they look right and if not what what you can do about it, ”Kuzmic said.
Errors should be dealt with with the two credit bureaus Equifax and TransUnion. Correcting errors can take time and you may need to send supporting documents. So you may need to check several times to confirm that the errors have been fixed.
Even if you haven’t used deferred payments, it’s still a good idea to check your credit score and score.
Equifax says that when you check your own credit information, there is no impact on your score number.