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COVID-19 amnesty over: Banks to resume reporting bad credit
New research from RateCity shows one in six Australians are worried about their credit scores in light of COVID-19, as banks resume credit reporting.
From April 1, the mortgage deferral program and corresponding credit score amnesty is over. The program was created at the height of COVID to provide automatic relief for people who experienced a drop in wages, with half a million home loans deferred at the peak.
Banks and credit providers will now begin reporting any late payments on loans or bills unless a person has filed for hardship with their bank.
This comes in the same week as up to 150,000 Australians are facing unemployment now JobKeeper is finished. It also coincides with the end of the Coronavirus supplement on government benefits, which sees a net reduction of $100 a fortnight to the JobSeeker payment.
Key April 1 changes:
| Credit reporting resumes | Banks and credit providers will begin reporting any late payments on loans or bills. |
| JobSeeker | Coronavirus Supplement of $150 per fortnight ends.
Base rate increases by $50. |
| Other government payments: | Coronavirus Supplement of $150 per fortnight ends.
Base rate increases by $50. |
RateCity research director, Sally Tindall, said: “A new wave of people unable to pay the bills is likely now that JobKeeper has gone.”
“The banks may have wrapped up their COVID mortgage deferral programs and finished the credit reporting amnesty, but that doesn't mean you're on your own.
“Anyone who thinks they’ll struggle to make their monthly mortgage repayments needs to act now. Don’t wait until you’ve missed a repayment to call your bank, because by then it’ll be too late, and will end up on your credit file.
“When you speak to your bank don’t hold back, be completely honest about your finances. There are hardship programs there to help you.
“If you are going into a hardship agreement with your bank, ask your bank how they are going to report it to the credit bureaus, as this could impact loans you apply for in the future.
“It’s also a good idea to keep track of your credit score and make sure your credit file is accurate,” she said.
Credit score concerns
A new RateCity survey of 1,005 Australians revealed one in six are concerned about their credit score in light of COVID-19.
Of those surveyed:
- 71% of respondents say they are not concerned
- 16% of respondents they are concerned
- 13% of respondents are unsure
- More men (22%) are concerned about their credit scores than women (11%)
- People aged 35-44 year are the most concerned of all age groups at 30%
Disclaimer
This article is over two years old, last updated on April 6, 2021. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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