Common COVID-19 Questions: Personal loan repayments & your credit score
COVID-19 is affecting us all and many Aussies are struggling with their repayments in a number of different ways. If you’re having trouble making your personal loan or car loan repayments, here are some of the things you can consider to protect your credit reputation during this time.
Late personal loan or car loan repayments can affect your credit score
Did you know that late payments can stay on your credit report for up to 2 years? If your financial situation has been impacted by the pandemic and you can’t afford to pay off your personal loan or car loan repayments, it’s imperative that you contact your lender or car dealership as soon as possible to discuss your hardship arrangement options.
Check out our article on options for managing your personal loan and car loan under the current climate
Can deferring your personal loan or car loan repayments impact your credit score?
According to the Australian Retail Credit Association’s consumer website, CreditSmart, Aussies who are granted a deferral on their loan repayments by their lender won’t have their credit score affected as part of this arrangement. If you want to get more information, you can speak to your lender and ask about their credit reporting practices.
5 tips to protect your credit score during tough times
- Contact your lender to discuss options for financial support
- Pay at least the minimum monthly amount on your loan repayments
- Pay your bills on time to avoid negative events being recorded on your credit file
- If you do decide you need to borrow more money, consider the risks in your lending options and how they might impact your credit reputation
- Regularly monitor your credit score & check the information on your credit reports
Want to find out where you stand now? You can check your credit score and credit file information for free anytime, anywhere with Credit Savvy.
What if my personal loan or car loan lender doesn’t have a COVID-19 relief plan?
Don’t worry, your lender is likely to have other forms of hardship assistance available for unforeseen circumstances. Contact your lender directly and see what they can do to help. You can also seek free alternative support from a variety of resources – check out our Key Resources page for more information.
Would I get charged late payment fees if I’m in hardship?
Many lenders are waiving late payment fees for a specific amount of time. As different lenders have different policies, check with your lender directly on how they handle their fees and charges.
Want to know more information about COVID-19?
The COVID-19 & your finances series contains tips and support information to help you manage your finances during this difficult time.
The information in this article is correct as at 7 May 2020. Credit Savvy endeavours to provide accurate information and no responsibility is taken for errors or oversights.