Credit card deferrals won’t hurt your credit score – if you get it in writing


Federal government encourages Canadian banks to do more to help troubled Canadians during COVID-19: “We continue to have discussions with them that are really focused on the need for banks to do more,” said Prime Minister Justin Trudeau at a press conference. Tuesday. “We recognized that they were going in the right direction. But we see every day that this crisis is more and more a challenge for everyone. Trudeau added that the government is working on other credit solutions for Canadians that will be announced in the coming days.

National Bank, will charge accrued interest. “Data-reactid =” 13 “> Last week, Canada’s five largest banks announced that they would lower interest rates for certain customers in response to the impact of COVID-19 on consumer finances. The move came soon after the banks announced the two to six month minimum payment deferral, the institution said. But the postponement is not a payment remission. All banks except the National Bank will charge accrued interest.

These measures are intended to help Canadians through difficult financial situations, but candidates also ask: Will this affect my credit rating?

“The short answer is no, it shouldn’t,” said Kelley Keehn, consumer advocate for FP Canada and personal financial educator. But Keehn added that you must clearly agree with your lender that these arrangements are deferrals – not defaults. A record of this arrangement is important to have on hand as proof of agreement and deferred payments.

Credit unions like Equifax and TransUnion cannot track all of these transactions, according to Keehn: “You want to make sure you get it in writing if you can. If you can’t get it in writing, you have to make sure you’re taking very good notes. This includes emailing details to keep track of time stamps and payment dates on your calendar. A deferred payment won’t hurt your credit score yet, but a missed payment will.

Licensed insolvency trustee Scott Terrio said having a paper record is not only a good way to prove the agreement, it can also guard against errors in the banks’ credit reporting system: “We see mistakes happen all the time, ”he said, referring to the paperwork problems he and his clients face with Ontario’s debt relief company Hoyes, Michalos & Associates.

These are mistakes made under normal circumstances. Now, with a system weighed under pressure from COVID-19, the staff of lenders is slim. “If you have the paperwork, you’re good. Otherwise, they will not help you. ”

Equifax and TransUnion offer Canadians free access to their credit reports and encourage frequent credit checks after requesting a deferral, although it will take 30 days to show if the report has had an impact. “Data-reactid =” 20 “> Equifax and TransUnion offer Canadians free access to their credit reports and encourage frequent credit checks after requesting a carry-over, although it will take 30 days to show if the report has had a impact.

To alleviate the financial pressures from COVID-19 customers, the banks agreed to cut interest rates and introduce credit card deferrals ranging from two to six months, depending on the institution.

BMO customers can apply online and request deferred payments through the message center. For customers without BMO online banking, they can complete an application form. The counselors aim to get back to clients within four days, according to the website.

CIBC’s approach to eligible clients is largely on a case-by-case basis, prompting claimants to complete a “Deferred Payment Request Form”. The CIBC advisory team will then review the client’s situation and discuss the options.

Applications can be made online. However, if your next payment is due within the next 48 hours, CIBC recommends that you make a request over the phone.

Clients may be eligible for the RBC deferral program as long as their personal or professional finances have experienced “financial difficulties due to COVID-19”. Cardholders have a choice between the two-month immediate rescue allowance and the six-month longer-term rescue option (which requires consulting with a counselor on a case-by-case basis to see who is eligible.)

You can submit a request by logging into your RBC account, selecting “Need to defer a minimum payment due to COVID-19?” and following the instructions.

To be eligible for the Scotiabank deferral program, you or one of your family members must be unemployed due to COVID-19 or have been affected by a significant reduction in income. Beyond that, Scotiabank advisors review client cases and discuss options.

The Scotiabank website explains that relief measures such as mortgage and automatic deferrals can be done online, but additional measures, such as minimum credit card payments, should be taken over the phone. They also warn that wait times will be longer than usual.

TD will allow its customers to defer payments for three months as long as they are the primary account holder; the card has been open for four months and is not a professional credit card; the account is in good standing, without default, bankruptcy or prior charge; and has not deferred credit card payments before.

Cardholders can request the carryover online as long as they are registered with the EasyWeb service or can make a request by phone.


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