COVID + Credit: Your Credit Questions Answered

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The Covid-19/Coronavirus pandemic has caused sudden job losses and financial worries for many people in Canada. As in any period of economic distress, being unable to pay your bills has consumers wondering what to do and worried about their financial future.

Canadians have been asking questions about their credit scores, and what they can do to protect them in the months to come. Keep reading to learn what you should be aware of, as well as the steps lenders and creditors are taking to ease the burden on borrowers across the country.

Q: What can I do if I’m having trouble paying my bills?

Follow these best practices to help minimize the impact of Coronavirus on your credit standing:

  • Ask for help. If you are unable to make even the minimum payment, your first step is to contact your lenders and creditors and see if any assistance is available. Assistance may include the ability to defer payments for some period of time.
  • If possible, pay what you can. Try to avoid making late payments. And, try to make at least the minimum payment on accounts, or pay any amount you and the lender or creditor agree upon.
  • Stay up to date on your credit reports. You are entitled to a free copy of your credit report at any time from both nationwide credit bureaus. You can find your updated Equifax credit report for free online here.
  • Consider adding a consumer statement to your credit reports. You can add a brief 100-word statement to your Equifax credit file to explain your financial situation.

Q: If I am diagnosed with Covid-19, is my credit affected?

In the case that you or your family member contracts Covid-19, it is important to remember that medical information is not reported to the Canadian credit bureaus, nor will it appear on your credit report or impact your credit scores directly. However, a reduction in your income may have an effect on your ability to pay lenders. You may wish to consider adding a consumer statement to your credit reports, which is free of charge. You can add a valid 100-word statement to your credit file, and it will be included each time your credit file is accessed. An example of a consumer statement could be “Be advised that the negative accounts on my credit report are related to the Coronavirus. I intend to make these up as soon as I can.”

Q: My lender has agreed to defer my payments for a period of time. Will this affect my credit standing?

In order to neutralize any negative impact that deferred payments might have on borrowers’ credit standings, Equifax and TransUnion worked closely with lenders, creditors, industry regulators and the Canadian government to develop updated credit reporting specifications in response to the Covid-19/Coronavirus pandemic. There are several aspects of deferred accounts which must be recorded on the borrower’s credit file in a certain way in order to protect their credit standing. More information is available here.

Q: Will other lenders and companies know that I have entered into a deferred payment arrangement?

In short, if the account is on your Equifax credit report, the fact that it is in a deferred status will likely be visible to other organizations which can legally access your credit history. You can learn more about who can access your Equifax credit report here.

Remember that some types of accounts are not reported to credit reporting agencies. For example, rent payments are rarely reported to credit reporting agencies, while property taxes and water, gas and electricity utilities are not. Any of your accounts which are not reported to Equifax would not appear on your Equifax credit report.

Q: How will I know if my deferred payments have been recorded on my credit report?

There are several indicators you can look for on your Equifax credit report. More information is available here.

Q: Where can I go if I have more questions?

Depending on the nature of your question, you may wish to contact your lender for specific details. We are also here to help. The Equifax Canada call centre hours and walk-up office locations have been affected by the pandemic. The latest information is available here.

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