Credit scores to be protected during Covid-19 pandemic

Earlier this month the government announced that residential or buy-to-let borrowers impacted by the crisis can ask their mortgage lender for a payment holiday of up to three months.

To help people applying for payment holidays, the credit reference agencies are implementing an 'emergency payment freeze' which will ensure that an individual’s current credit score is protected for the duration of an agreed payment holiday.

Other special arrangements, including reduced payments, paused payments or increased credit limits, are also covered by the emergency payment freeze agreement.

The agencies confirmed that an emergency payment freeze will not be recorded anywhere on a credit report and will not increase the level of any existing arrears.

Jonathan Westley, chief data officer at Experian, said: “These are challenging times. While everyone is rightly focused on staying safe and healthy, we know that many people are also concerned about the impact on their income. If you’re worried about meeting regular payments because of the pandemic, it is crucial that you speak to your lenders and other providers as soon as possible so they can help.

“Many lenders are offering payment holidays or other arrangements to help people who have been affected by the outbreak. Through this new industry agreement, Experian, TransUnion and Equifax are helping protect people’s credit scores during these difficult and unprecedented times.”