Any hardship affecting rating should be void

mbehery

Who believes that people that are going through financial hardship should be penalised for missing payments or entering debt management due to the ongoing pandemic should have their credit score impacted?

Borrowing is going through the roof both nationally and internationally too. 

What are your thoughts? 

D3xt3r5L4b

It’s a true reflection of a persons activities so absolutely it should be recorded.

As any MSE’er would say - people should have backup/emergency funds put aside for such situations in order to cover bills etc. 

And “Credit Scores” are not impacted as lenders don’t see them.

Timbosaurus

I can see where you are coming from, but ultimately a great deal of financial difficulty is caused for reasons beyond the borrower's control.  Credit histories aren't simply there to demonstrate profligacy or poor management of money, they are there to indicate financial risk.  If someone is in trouble, for whatever reason, other lenders are likely to want to know about it.

[Deleted User]

I agree with the posters above that those in trouble (payment holidays, missed payments or whatever) should be reported.

However (you may not be aware), just to let you know that lenders have agreed not to record adverse data - which I think is totally wrong. If you were up to date beforehand, then as long as the payment holiday is agreed, you should be reported as being up to date throughout. Likewise if you were 2 months in arrears beforehand, you would remain 2 months in arrears throughout. How that works in reality remains to be seen.

As an example, I've been offered the opportunity not to pay one of my 0% debts at no cost. I was tempted to take it even though I'm on full pay (no impact to credit rating and I can better save/invest the money), but there is a risk that these 'no adverse markers' won't be applied properly and therefore there will be a backdoor way of determining someone was in a payment holiday. For example, 3 consecutive months of no update in/around April to June 2020 would indicate it's highly likely someone took a payment holiday. So the only 'real' way to have 'no impact' is to update 3 x status 0's. But I don't think that's fair, as there haven't been 3 x status 0's!

I accept that many of us are in good positions (e.g. essential workers), but anyone that's struggling now, especially this early on, surely didn't have a sufficient emergency/contingency fund? If it drags on for 6/9 months, fair enough, I can see the argument for not trashing tonnes of credit files. But if we're out of lockdown in just a few more weeks, then I can't see how this has been that different to when Thomas Cook employees were let go at short notice - some of them struggled. Those people weren't eligible for [unrecorded] payment holidays and as such may be struggling to refinance card/loan or mortgage debt for months or potentially years to come (e.g. credit score fails). How is that fair?

cymruchris

There will be people who have saved for a rainy day (and have had the ability to do so) that will continue to service their commitments - and there will be people that are currently struggling - I do think that factually a record of those that continued to service their commitments - and a record of those that struggled - should be kept accurately. I do believe that nobody should be significantly adversely affected by the current situation, however I also think that those that managed to continue to keep to their commitments should be recognised as such in any future lending decisions.