Credit ratings during coronavirus

luckylouise08

Just wondered if credit rating providers are taking in any considerations during coronavirus on credit ratings? I am in a fortunate position right now but I felt many people may not be. Any knowledge on this topic ?

[Deleted User]

They'll continue to report the data as provided by the lenders.

They don't provide any interpretation of it apart from the scores, which don't matter.

If you have concerns, you need to confirm how each lender is reporting any ad hoc arrangements.

luckylouise08

Deleted_User said:

They'll continue to report the data as provided by the lenders.

They don't provide any interpretation of it apart from the scores, which don't matter.

If you have concerns, you need to confirm how each lender is reporting any ad hoc arrangements.

Ok thanks. Was just thinking in terms of people that may be struggling e.g. self employed and no funding from the government whilst out of work and that kind of situation 

D3xt3r5L4b

Then the self-employed should have their own backup or emergency pot and not rely on the government to bail them out. 

Other than that lenders will still report an accurate representation of account behaviour 

Thrugelmir

Lenders will disregard information for the period of the crisis. To compensate there'll be a general tightening of criteria once the crisis is over. The hurdles to jump will be higher. 

DCFC79

luckylouise08 said:

Just wondered if credit rating providers are taking in any considerations during coronavirus on credit ratings? I am in a fortunate position right now but I felt many people may not be. Any knowledge on this topic ?

The ratings don't mean much since lenders don't even see them, what matters more is the history.

stehouk

iv'e just checked mine and iv'e hit top spot with an experian credit of score of 999 and very good (all green) on both credit card affordability and loans.
97% on credit hit rate, beat that if you can (all tongue in cheek of course).
woops its raining now so best go back and check it again as its probably dropped a few points.

cymruchris

Thrugelmir said:

Lenders will disregard information for the period of the crisis. To compensate there'll be a general tightening of criteria once the crisis is over. The hurdles to jump will be higher. 

I don't think they'll disregard it - they will certainly still bear it in mind - as there will in reality be people that can continue servicing their debts from whatever means they have, and there will be those that will struggle. It'll demonstrate (rightly or wrongly) those that managed to keep to their commitments - so I would imagine they'd be seen in a more positive light. I don't think lenders will particularly hold this period against people, but I do think they won't completely disregard it either. There will be an element of compassion and understanding, but if you've kept up your payments, you'll be seen more positively than someone that hasn't, after all it's all about risk.

D3xt3r5L4b

combatcolin said:

I would hope any future mortgage applications or whatever would take into consideration missed payments or anything during this crisis 

Why?

onlyfoolsandparking

cymruchris said:

Thrugelmir said:

Lenders will disregard information for the period of the crisis. To compensate there'll be a general tightening of criteria once the crisis is over. The hurdles to jump will be higher. 

I don't think they'll disregard it - they will certainly still bear it in mind - as there will in reality be people that can continue servicing their debts from whatever means they have, and there will be those that will struggle. It'll demonstrate (rightly or wrongly) those that managed to keep to their commitments - so I would imagine they'd be seen in a more positive light. I don't think lenders will particularly hold this period against people, but I do think they won't completely disregard it either. There will be an element of compassion and understanding, but if you've kept up your payments, you'll be seen more positively than someone that hasn't, after all it's all about risk.

Me neither, in fact I think if anyone is unfortunate enough to have to use payment holidays for CC,s Mortgage or loans it will definitely have an impact further down the line in respect of future borrowing or trying to get the very best finance deals. lending criteria is going to tighten up considerably, how can it not? and whilst I would like to think those of us who have been able to keep payments up during this crisis (and I'm one of those) wont be penalised the same as those who have missed payments we're all gonna pay big style for this pandemic. Ultimately nobody should realistically expect to miss payments with or without permission and keep a perfect credit history, otherwise the whole 'credit file' system will have to be rewritten. we've all just got to get on with it and try not to stress over our files and absolutely not stress over 'made up' credit scores. 

Malkytheheed

What are we always told? First things first. Build a 6 month emergency fund. 
This pandemic is exact the reason we do that. If people are living month to month and now can't service their debts then creditors will not look on this favourably. They may have "got away with it" in the past but this shows how close to the edge they were.