Credit Score significantly impacted by Covid Mortgage holiday

sambaird

Malkytheheed said:

Payment holidays were meant for those who had been made redundant, not those on 80% salary. Your finnances should easily be able to cover your mortgage on 80% salary. Just take from your "fun money" pot.

 No, payment holidays have been available for any that have requested them.

I’ve been fortunate that I’ve not been financially affected by Covid. WFH on full pay. I applied for payment holidays on all of my credit cards straight away and for the past 3 months have been using the money usually dedicated for minimum payments on the others to throw on one card that had a high interest rate.  With that, plus the money I’ve saved by WFH and the ‘fun pot’ as you put it - I’ve been able to completely pay off that card. When the payment holidays end, I’ll now have an extra £250pm freed up to make a dent in the other cards.

Some people might call that sensible financial management.

Willing2Learn

According to the FCA guidance to 'firms', they should ensure that if you take a payment holiday it will not have a negative impact on your credit file.
https://www.fca.org.uk/consumers/mortgages-coronavirus-consumers

D3xt3r5L4b

Willing2Learn said:

According to the FCA guidance to 'firms', they should ensure that if you take a payment holiday it will not have a negative impact on your credit file.
https://www.fca.org.uk/consumers/mortgages-coronavirus-consumers

It probably doesn’t. But a lender will likely see the balance hasn’t decreased for 3 months and make their own assumptions despite the “green tick”. 

And the “score” is probably reacting to the balance not decreasing. 

Willing2Learn

I wonder if this would be an example of a time when submitting a Notice of Correction on each of your credit files might be helpful?   This would be to explain that there was a COVID-19 three-month mortgage holiday agreed with your mortgage provider.

[Deleted User]

An NoC would just draw more attention to it. It's never a good idea.

Thrugelmir

Willing2Learn said:

I wonder if this would be an example of a time when submitting a Notice of Correction on each of your credit files might be helpful?   This would be to explain that there was a COVID-19 three-month mortgage holiday agreed with your mortgage provider.

Doesn't alter the fact that the borrowers finances (at the time) appeared to be weak. That's going to be a major consideration for the foreseeable future. 

ayvamummy

NOC do more harm than good! I wouldn’t recommend that at all. 

Malkytheheed

sambaird said:

Malkytheheed said:

Payment holidays were meant for those who had been made redundant, not those on 80% salary. Your finnances should easily be able to cover your mortgage on 80% salary. Just take from your "fun money" pot.

 No, payment holidays have been available for any that have requested them.

I’ve been fortunate that I’ve not been financially affected by Covid. WFH on full pay. I applied for payment holidays on all of my credit cards straight away and for the past 3 months have been using the money usually dedicated for minimum payments on the others to throw on one card that had a high interest rate.  With that, plus the money I’ve saved by WFH and the ‘fun pot’ as you put it - I’ve been able to completely pay off that card. When the payment holidays end, I’ll now have an extra £250pm freed up to make a dent in the other cards.

Some people might call that sensible financial management.

Sensible financial management? Really?

You are paying minimum payment on high interest bearing cards (multiple). You have had to take a 3 month leave from paying the debt you owe to try and pay the debt you owe and this is sensible financial advice? 

Your credit files will be marked negatively as a result of your payment break. And as they should be. It is clear you are living way outside your means. Lenders need the clearest picture they can about who they might be lending to. 

sharpe106

I’ve been fortunate that I’ve not been financially affected by Covid. WFH on full pay. I applied for payment holidays on all of my credit cards straight away and for the past 3 months have been using the money usually dedicated for minimum payments on the others to throw on one card that had a high interest rate.  With that, plus the money I’ve saved by WFH and the ‘fun pot’ as you put it - I’ve been able to completely pay off that card. When the payment holidays end, I’ll now have an extra £250pm freed up to make a dent in the other cards.

Some people might call that sensible financial management.

You have swapped a priority debt to a non-priority debt. For somebody with debt is not always the smartest of moves.  I also thought that you had to self-declare that you had been effected by the virus when applying for the holiday.

sambaird

You have swapped a priority debt to a non-priority debt. For somebody with debt is not always the smartest of moves.  I also thought that you had to self-declare that you had been effected by the virus when applying for the holiday.

What priority debt have I swapped to a non priority debt?

The only holidays I’ve taken are for cards. I Didn’t take a holiday on my mortgage or any other outgoings.