Since March last year, millions of people have taken a temporary payment holiday on their mortgage, credit card or loan payments. The Financial Conduct Authority (FCA) advised lenders to offer payment holidays to people who were struggling to meet monthly payments due to coronavirus.

The deadline to apply for a payment holiday has now passed – you will only be able to access a payment holiday if you applied before 31 March 2021

(There is one exception to this rule. If you’re currently on a payment holiday, you can extend it up to 31 July 2021, as long as that doesn’t take you over the six month payment holiday limit).

Remember that you’ll still be charged interest during a payment holiday. The interest will be added to your total balance, so your minimum payment might go up once the payment holiday ends. For this reason, it’s important you speak to your lenders about your situation, and how you can make monthly payments once they restart.

If you’ve missed the payment holiday deadline, there is still help available in the form of ‘tailored support’. We outline what this involves below.

A payment holiday won’t appear on your credit report and should not affect your credit score. Usually, missed payments would be reported by the lender to the credit reference agency.

The first six months of payment holidays, where it’s arranged as a result of the pandemic, should not appear on your credit report as long as it’s agreed with your lender in advance. Usually, missed payments would be reported by the lender to the credit reference agency.

If you simply cancel your direct debit or fail to make a repayment on the usual date without prior agreement it will register as a missed payment on your credit report, which may result in you being charged a fee.

Once a payment holiday is in place, it's a good idea to check your credit report to make sure it's not resulting in new missed payments being reported by your lender.

Household utility firms (for example water and energy suppliers) are taking differing approaches to how they support consumers at this time, which may result in changes to how they update your credit report. If you agree to defer payment to them, you should ask the company how they will show this on your credit report.

As well as the payment status of your accounts, credit scores also take into account many other factors, such as your total level of unsecured debt (for example, the balance of any credit cards, personal loans and overdrafts) and how heavily you’re using your credit cards (your credit utilisation).

Lenders don’t just use credit reports and credit scores to assess your creditworthiness when you apply for a mortgage. They also use information from your application form, and sometimes your bank account, to consider whether you can afford the new payments. If you’ve taken a recent payment holiday, some lenders may look at your application more carefully.

If you’ve recently taken an agreed payment holiday and are about to apply for a mortgage, it’s important to speak to lenders directly before you apply. Ask them whether your agreed payment holiday might affect your application.

Now the payment holiday deadline has passed, lenders will typically offer ‘tailored support’. The support you are given will depend on your circumstances.

If you’re struggling with payments for any type of credit, check what help your lender offers.

For mortgage holders, tailored support could include a pause or reduction in payments, or changing the terms of your mortgage.

For those struggling with loan or credit card payments, tailored support could involve pausing or reducing payments, or agreeing an affordable repayment plan.

It's important to note that if your tailored support takes the form of further payment deferrals or reductions, this may appear on your credit report as a temporary payment arrangement. An arrangement flag will stay on your report for three years after the arrangement ends. Also, you’ll probably see your arrears build up (‘arrears’ means the amount of money you owe and should have paid earlier) during any payment reduction or break. These changes to your report may affect your chances of getting accepted for credit.

Lenders should explain how any support they offer may impact your credit report.

During this challenging time we want to help give you as much guidance as possible. You can find more information on our Coronavirus help page.