This is a very troubling and uncertain time and we know that lots of you are worried about how Coronavirus affects your finances.

We’re working with lenders on finding ways to help reduce the impact of Coronavirus on your credit report. For example, if you both agree to pause regular payments for a while.

We also want to help answer as many of your questions as we can to arm you with the advice and guidance you need. And, where possible, to help you save money where you can.

Payment holiday

What if I’m unable to make one or more regular payments because of the pandemic?

If you’re struggling to make ends meet, contact your lenders and other providers as soon as possible. They’ll talk you through any support (otherwise known as forbearance) they can provide to help you through this difficult time. This could include reducing your payments, pausing your payments for a while, increasing your credit limit, or other forms of help.

If you’re worried about your finances and would benefit from independent advice, there are several providers of free, professional, impartial support that you can contact, including National Debtline, StepChange Debt Charity, Citizens Advice and Payplan.

I tried to call my lender but couldn’t get through. Could I just cancel my Direct Debit?

If you can’t get through by phone, you may be able to apply online. Our online guide shows which lenders have created online forms, where you can also find other useful contact information.

Please don’t pause repayments, for example by cancelling Direct Debits, without first agreeing this with your lenders and providers. Missed payments not agreed with your lender could affect your chances of getting credit in the future.

What is a payment holiday?

Following the Chancellor’s announcement in March, and new FCA proposals, lenders have agreed to offer a payment holiday on mortgages, loans and credit cards. This means that if you can’t meet your regular payment as a result of the Coronavirus impact, you can speak to your lender about taking a break in your payments by up to three months.

All payment holidays must be agreed with your lender and interest will still be charged for the duration of your payment holiday. This could mean an increase in your future monthly payments or an extension to your loan term. If you take a credit card payment holiday, you will likely see your overall balance rise if interest is charged and no payments are being made.

We would recommend that you discuss this with your lender to make sure it’s the right option for you, understand the terms of the agreement, and secure written confirmation of the arrangement if you agree a payment holiday.

On the 22 May, the FCA announced that lenders should continue to support customers who are struggling to pay their mortgage due to Coronavirus. This means that if you have not yet agreed a payment holiday with your lender, you now have until the 31 October to request one. If you are already on a mortgage payment holiday, your lender should contact you at the end of the holiday to find out if you can afford to resume payments. If you are still struggling to afford repayments, your lender could extend the holiday by a further three months.

From 18 May, insurance companies will have to reassess the risk of providing insurance to customers, and lower premiums if the risk is now lower. If you pay for insurance by monthly instalments and are still struggling to make your payments after your cover has been reassessed, insurers will be expected to offer a payment holiday of up to three months. This applies to car, van and motorbike insurance, home insurance, travel insurance, boiler cover, income protection insurance, critical illness cover, life insurance, private medical insurance and premium credit providers.

Is there a payment holiday application deadline?

Yes, the deadlines are as follows:

  • Mortgage - 31 October
  • Personal loan, credit cards, store cards and catalogue debt - 31 October
  • Loan and credit card - 14 July
  • Payday loans, Buy Now Pay Later, rent-to-own, and pawnbroking – 27 July
  • Insurance (car, home, loan etc.) - 18 August

So, make sure you contact your lender/s before these dates.

Will taking an agreed payment holiday negatively affect my credit report?

If you agree with a lender to temporarily pause your payments to help you through this difficult time, this should not result in arrears building up on your credit report.

This is because new credit-reporting guidance that we’ve agreed with banks, lenders and insurers allows for a new measure called an ‘emergency payment freeze’. It has been developed directly in response to Coronavirus, to help support customers who have agreed a payment holiday with their lender.

We would recommend getting written confirmation of the arrangement you agree with your lender.

It’s really important that you contact your lenders and other providers as soon as you think you won’t be able to make any expected payments, so they can help.

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. Where you agree a payment freeze with them, you should ask the company how they will show this on your credit report.

How will this payment freeze be reflected on my credit report?

If you and your lender agree an emergency payment freeze, the payment status of your account (with that lender) should not get worse while your payments are paused.

For example, if your account was up to date before the freeze began, your account will continue to show as up to date until the freeze ends. If you were already behind with payments, the level of arrears before the freeze began will continue for the length of the freeze. During the freeze, the monthly payment amount and status code shown on your report will stay the same.

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. Where you agree a payment freeze with them, you should ask the company how they will show this on your credit report.

What if my lender agreed to an emergency payment freeze but still recorded new missed payments on my credit report?

If you check your report and find that arrears have built up on account while a payment freeze was agreed, you should contact the lender first to discuss this and ask them to have them removed from your credit report.

If you need help with this, we can contact them on your behalf. If we raise a query with a lender for you, we will let you know the outcome once they respond.

Please bear in mind that during the Coronavirus pandemic, we and lenders may be busier than usual. So we’re able to support our customers in the most vulnerable situations, we kindly ask that you only contact us if your query is urgent. We are sorry for the inconvenience, but you can find help online and through the Experian app.

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. Where you agree a payment freeze with them, you should ask the company how they will show this on your credit report.

Will the payment freeze be recorded anywhere on my credit report?

No, the fact that you agreed a payment freeze with a lender or provider will not be recorded on those accounts or anywhere else on your credit report.

Agreeing with lenders to pause your payments for a while should not result in missed payments building up on your credit report. This should generally mean your credit score won’t be damaged.

As well as the payment status of your accounts, credit scores also take account of 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).

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. Where you agree a payment freeze with them, you should ask the company how they will show this on your credit report.

Could my recent payment holiday affect my mortgage application?

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.

If I have a payment holiday on one of my credit accounts, will I automatically have a payment holiday on all of my other credit accounts?

If you have more than one account with a lender (for example a credit card, loan or mortgage) you will need to arrange a payment holiday for each account. If you have accounts with different lenders, you’ll also need to speak to each one to arrange a payment freeze, a week before your payment date.

What are mortgage holiday pros and cons?

If you’ll struggle to make your normal monthly mortgage payment, then it’s the right time to speak to your lender to see what support is available. Mortgage holidays can provide some breathing space but remember that interest will still be charged and added to the balance. So, your normal monthly payment might increase slightly afterwards. You should always agree a payment freeze with your lender first, which should mean your credit score is protected.

Can my home be repossessed?

If you’re worried you might miss a mortgage payment it’s important you contact your mortgage lender as soon as possible to see what help is available. For example, you may be able to agree a temporary payment holiday to help you get by. The Financial Conduct Authority has instructed banks and building societies to not repossess homes during the crisis. As many firms’ call centres are very busy just now we suggest you try the lender’s website first.

Can I stop paying my rent?

If you’re worried you won’t be able to pay your rent, speak to your landlord as soon as possible to see how they could help. To try to help, the government has confirmed that buy-to-let landlords whose tenants are impacted by the pandemic can apply for a mortgage payment holiday and then pass on the forbearance to the tenant/s.

You should know that all landlords in England and Wales must give three months’ notice before starting eviction proceedings according to emergency legislation that was passed on 25 March.

How do I apply for government support if I’ve lost my job?

If you have worked as an employee in the past two to three years and paid National Insurance contributions then you may be able to also receive the “new style” jobseeker’s allowance. It’s paid for up to 182 days, (around six months). Check if you're eligible here.

You would usually need to book an interview with Jobcentre Plus to prove you have been looking for work. However, this will not be necessary during the coronavirus period. Universal Credit may be available to you. If your household has got savings of £16,000 or over you won't be eligible for Universal Credit.

Charity Turn2Us has a free benefits calculator you can use to work out what you might be eligible for. For example, you might qualify for a reduction if your income has dropped or if you started claiming benefits recently.

You should also check your local council's rules to see if you qualify for a council tax reduction.

My husband / wife has lost their job what should we do?

Since your largest financial commitment is likely to be your mortgage, speak to your lender about the support options available, such as a payment holiday.

Please don’t pause repayments, for example by cancelling Direct Debits, without first agreeing this with your lender. Missed payments not agreed with your lender could affect your chances of getting credit in the future.

If you rent, your landlord also has the option to take a mortgage holiday so get in touch soon to discuss your options.

The Financial Conduct Authority has said banks should allow a £500 interest-free overdraft and offer payment holidays on loans, credit cards, store cards and catalogue credit for up to three months. If you’re already on an agreed payment holiday, from 1 July you could extend it for a further three months or arrange to make partial payments for the next three months. If you’ve already arranged an interest-free overdraft on your current account, you can request up to £500 interest-free for a further three months.

You should also contact your employer to see if they’re now willing to take you back on and reassign you as a furloughed worker. The Government’s job retention scheme will pay 80% of retained workers’ salaries, up to £2,500 a month. Payments are backdated to 1 March. If your employer refuses, Citizens Advice says there needs to be a fair reason for you being dismissed - for example, the business might downsize or fold and go into administration. In this situation, you should be due a redundancy payout.

I’m self-employed what help can I get?

If you’re self-employed and will struggle to make loan repayments due to loss of earnings, you should speak to your lender. Lenders will be trying to support customers who are most financially vulnerable, and this could include payment freezes or other forms of forbearance.

You can also find details of other forms of support that might be available to sole traders and businesses on the Business Debtline website. This includes guidance on the recently announced Self-employment Income Support Scheme.

I’m on a zero hours contract, what help can I get?

We understand this will be a troubling time financially, as it may mean a loss of earnings for the foreseeable future. If you’ll struggle to meet existing financial commitments such as a mobile phone, credit card, or loan, then you should speak to the lenders and providers as soon as possible. They may be able to offer support, such as a payment holiday.

How will the extra repayments work with loans?

If you agree a loan repayment holiday (you have until 31 October) you won’t have to pay anything for up to three months from the date it’s granted. Remember that interest will be added during the payment freeze, so your normal monthly payment may rise when it ends. Make sure to understand any change to the terms and you get the agreement first before you stop making payments.

If I get a payment holiday on my loan, can the firm ask my guarantor to pay?

Guarantor loans are covered by the same payment holiday rules. If you’re the account holder and will struggle to make your payment, speak to your lender right away. If you don’t agree a holiday they will usually record a missed payment on your credit report, and ask your guarantor to start covering the costs.

Can I get a payment holiday on my payday loan or home credit loan?

Following FCA guidance, people can now get a one-month payment break on their payday loan, which includes freezing the interest. Home credit loans are offering up to three-month payment holidays if you’re financially affected by coronavirus. If you need support, speak to your lender right away.

What if I'm on a 0% deal - will I lose it if I take a payment holiday?

No. If you agree a payment holiday with the lender you won’t be penalised by having your 0% offer taken away. You must make sure you agree this with the lender first and understand whether it changes the duration of your promotional rate.

Managing loans, credit cards & overdrafts

Will the credit card companies lower their interest rates?

There’s no universal commitment to reduce interest rates on credit cards or other products at this moment. However, there are still 0% promotional periods available on balance transfer credit cards. If you’re paying interest on a credit card balance at the moment, you could save on your monthly outgoings by switching to one of these cards but remember, transfer fees may apply.

Can I ask my bank to stop charging arranged overdraft fees during this period?

If you have an existing arranged overdraft with your lender, and are negatively impacted by the Coronavirus, lenders have agreed to an interest free overdraft up to £500 for three months.

Each lender may have a different policy, so you should contact them (or check online) to see what support is available.

If I use my existing credit accounts to help me cope financially for a few months, will this damage my credit score?

Credit can provide a useful financial buffer at unprecedented times like these. Make sure you’ve considered all your financial options first and you’re up to speed on the latest information about financial support available from the UK Government.

Building up debt on credit cards and overdrafts, for example, can be expensive and is likely to affect your chances of getting credit in the future. This is because credit scoring usually looks at factors like your outstanding balances and how heavily you’re using your credit cards.

I’m thinking of applying for a balance transfer card to help reduce the cost of my existing debt. How can I shop around without damaging my credit score?

If you’re paying interest on existing credit card debt, switching it to a 0% balance transfer deal can cut your costs and give you some extra breathing space in the long-term. 0% purchase cards used carefully can also help you spread the cost of a large purchase or provide a short-term financial buffer.

To help you find the right deal for you, make sure you use an eligibility-checking service. These can help you see which cards you qualify for and in some cases exactly what deal you’ll get. They also only register soft searches on your credit report – these don’t affect credit scores and are only visible to you – until you decide on the best deal and submit a formal application.

If you have any existing credit cards with little or no balances on, you could check with those lenders to see if they have any balance transfer promotions available, which could enable you to transfer other debt on to them and save some money that way. But bear in mind you may need to pay a small transfer fee.

Make sure you’ve also considered all your financial options first and you’re up to speed on the latest information about financial support available from the UK Government.

Can I still see my credit report during the pandemic?

You can check your Experian Credit Score for free on our website by registering for a free account. We update your score every 30 days, so this can help you keep an eye on things. If you notice any significant changes to your score, it’s probably wise to then check your full Experian Credit Report.

You can apply to view your statutory credit report for free from Experian at any time. During the pandemic, we will let you know if there might be any delays sending out your report. You can also view your Experian Credit Report through our Credit Expert subscription. If you don’t want to keep the service after your free trial, you can easily change it to a free account.

During the Coronavirus pandemic, we’ll let you know if there might be any delays sending out your report.

What can I do to look after my credit rating?

Checking your credit report and score on a regular basis can help you spot and resolve any issues, such as incorrect missed payments or unauthorised credit applications. You can then let us know so we can help. Regular monitoring can also help you identify things you might be able to do to improve your score and spot fraud early.

What if I can’t pay my car finance loan?

The FCA has asked motor finance lenders to offer payment holidays where coronavirus has had a financial impact and you cannot meet your monthly payment. This is called a ‘payment deferral’ and should last for up to three months from the time you request it.

What is voluntary termination?

Ending a car finance agreement early using ‘voluntary termination’ is your legal right, as long as you’ve paid at least half of the total amount due and you hand the car back in satisfactory condition. You should then be left owing nothing and the lender should update your credit report to reflect this. The lender may also add a voluntary termination marker to the entry on your credit report which explains to other lenders why the finance was settled early.

Your credit score should not be affected, as long as you have paid all of your monthly payments on time up to the point you hand the keys back, so you should not see any late payments registered.

The current credit marketplace

Is it harder to get a loan now?

Lenders are constantly reviewing the products and deals they offer. While we’ve seen that some lenders have removed their most competitive offers there are still attractive offers out there, so if you’re considering taking out new credit it might be wise to start shopping around soon to benefit from lower rates which will cost you less in the long run.

You can use comparison services, like ours, which don’t affect your credit score. They can also show you your chances of acceptance, as well as things like what interest rates and credit limits you’ll get. Experian is a credit broker not a lender†

Please remember, it’s important you only take out credit you can afford to repay.

Will I get a better rate on a personal loan now that the interest rate has dropped?

Not necessarily. While sometimes lenders do reduce rates when the Bank of England base rate reduces, this is not something we’ve seen yet. Lenders also regularly review their lending acceptance criteria and the economic impact of the Coronavirus pandemic means they are likely to be doing this now.

If you’re searching for a loan you should use comparison services, like ours, to see what deals you’re likely to qualify for. This won’t affect your credit score.

Will lenders be less likely to lend you money at present due to the current situation?

Each lender will have its own rules and policies about how it lends and the deals it offers. They regularly review their lending acceptance criteria and the financial impact of the Coronavirus pandemic means they are likely to be doing this now. Some of the most competitive deals have been removed from the market, but it’s important to do some research before applying for new credit.

Make sure you shop around to get the best deals you and your circumstances. The good news is that this search won’t affect your credit score.

Are mortgages still being approved?

Some lenders have reduced the number of products they currently offer, but there are still mortgage deals available. Although interest rates are low, you may find slightly higher deposits are required now. If you’re starting your search then use an eligibility-checking service, to see what deals you’re likely to qualify for without affecting your score.

Will being furloughed affect whether I’ll be approved for a mortgage?

If you’ve been furloughed due to the pandemic, you may now have fewer mortgage options. This is because some lenders are setting strict rules on whether they will lend to homebuyers who are still relying on government support.

Back in May banks were generally allowing mortgage applications from furloughed workers, but now some lenders are limiting which deals furloughed workers are eligible for. Some lenders are refusing to consider furloughed income when assessing affordability and others are only accepting furloughed applicants if they’re applying to borrow with a partner who hasn’t been furloughed.

If you’ve been furloughed, you may need to put your homebuying plans on hold until lenders relax their restrictions.

If you’ve been furloughed and your current mortgage is coming to the end of its fixed term, you should be able to switch to another deal with the same lender.

With interest rates falling, is now a good time to switch mortgage?

The bank of England base rate is currently 0.1%, which may mean you could remortgage and get a cheaper deal. It will depend on your circumstances whether it will be a good time to switch. Make sure you factor in any fees (which could be high) over the term of your new deal. Use comparison sites, like ours, to explore your options easily. These won’t affect your score but will give you an idea of the mortgage terms and how likely you are to be accepted (your eligibility) based on our selection of lenders.

Is it advisable to take out more credit to assist at this time?

If you’re already struggling, think very carefully about taking out more credit. Make sure you’ve considered all your financial options first and you’re up to speed on the latest information about financial support available from the UK Government.

Credit can provide a useful financial buffer at unprecedented times like these. Do remember, though, that you’ll eventually have to repay any additional borrowing, so we recommend reviewing your regular spending to see if you can reduce your outgoings and make things easier for yourself in the future.

If you’re paying interest on existing credit card debt, switching it to a 0% balance transfer deal can cut your costs and give you some extra breathing space. 0% purchase cards used carefully can also help you spread the cost of a large purchase or provide a short-term financial buffer.

To help you find the right deal right for you, make sure you use an eligibility-checking service. These can help you see which cards you qualify for and, in some cases, exactly what deal you’ll get. They also only register soft footprints on your credit report – the type that don’t affect credit scores – until you decide on the best deal and apply for it.

During this period of uncertainty, are the banks still going ahead with their plan for arranged and unarranged overdrafts?

For the next three months it’s been agreed that nobody should be charged more under the new rates that came in on 6 April. So, if you’re using more than your interest free arranged overdraft amount, you’ll still be paying the older (lower) rate for now.

Banks are also offering arranged interest free overdrafts, of up to £500, if you already have an existing overdraft on a main account. If you take advantage of the interest free overdraft charges, it’s a good idea to discuss with the lender when this period will end, and what future charges will be.

What happens after three months’ £500 interest-free overdraft?

If your bank has automatically granted an interest-free overdraft up to three months, then that offer will end after the three months. If you had to ask for your interest-free overdraft, then that will last for up to three months from the time you requested it. If after the initial three-month period, your finances are still being affected by the impact of Coronavirus, you can request up to £500 interest-free for a further three months.

What if I don't already have an overdraft?

If you don’t have an overdraft, then you could apply for one with your lender. Normal lending rules would still apply, so it’s likely they’ll do a credit check to help them decide whether to accept your application for one.

Will the overdraft be shown on my credit report?

Yes. The arranged overdraft limit is shown on your credit report, along with how much you are currently using. It’s a good idea to try and keep the amount you use as low as possible, and avoid going over the arranged limit. If you’re worried you might go over, or not have sufficient funds, then talk to your lender right away.

'Persistent debt' rules have been relaxed - what changed?

If you pay more on interest and fees on your credit/store card than you do paying the capital over 18 months, then you are classed as being in persistent debt. Existing rules meant lenders would need to help customers to repay their balance, which could also mean their card would be suspended after a period of time (usually 36 months). The measures have been relaxed temporarily, so no credit cards will be suspended until at least October. If you’ve been contacted about persistent debt then you should always speak to your lender to discuss your options or a suitable repayment plan.

Household bills

I can’t pay my electricity/gas bill

If you might struggle to pay your energy bill, speak to the provider/s as soon as possible to see how they can help. Many are providing flexible payment arrangements to help support customers through these difficult times. As many firms’ call centres are very busy just now we suggest you try their website first.

If you’re a prepayment customer and are currently self-isolating, you could benefit from the emergency measure being introduced by energy providers. You can find more information on that here.

It’s also a good idea to compare energy prices and make sure you’re taking advantage of the best offers available.

I can’t pay my mobile / broadband bill

If meeting your mobile phone / broadband bill is going to be tough, speak to the provider/s as soon as possible to see how they can help. We suggest you try their website first.

Identity fraud

I’ve read about scammers trying to cash in on the pandemic. What can I do to stay safe?

Con artists may try to take advantage of a crisis like this, for example by sending out phishing emails designed to trick us into revealing confidential information about ourselves. So please stay vigilant and be extra careful to safeguard your identity, particularly if you receive unsolicited emails, calls, or text messages. There are more tips on protecting your details and credit rating here.

Support available

What salary support is available if I’ve been furloughed?

If your employer’s operations have been severely affected because of Coronavirus, they might have furloughed some or all of their employees. This means putting you on ‘temporary leave’.

The Coronavirus Job Retention Scheme means when an employee is furloughed the government will pay 80% of their salary, up to £2,500. Some employers may offer to ‘top-up’ the additional 20%, so it’s worth checking with them.

If you left your employment after 28 February by either resignation, redundancy or losing your job, you can now ask your former employer to rehire and furlough you.

The government’s furlough scheme has been extended until the end of October. From July onwards, claims to the scheme will be restricted to employers currently using the scheme and employees who were on the furlough scheme before 10 June.

I’ll soon be returning to work after being on maternity leave, can my employer put me on the government’s furlough scheme?

Yes, if you are currently on statutory maternity or paternity leave and will return to work in the coming months, you are eligible for the government’s furlough scheme. This rule also applies if you are currently on adoption leave, shared parental leave or parental bereavement leave. However, you’ll only be eligible if you work for an employer that has previously furloughed employees.

My child normally gets free school meals so is there any financial support available to cover my additional food bills?

If your child qualifies for free school meals then it’s likely they will be entitled to support while they aren’t at school. This will either be a food parcel or £15 in supermarket vouchers that are delivered each week.

If you haven’t heard anything already it’s a good time to check with the school, or local authority.

My energy bills have gone up considerably since I’ve been working from home. Is there any support to help cover this cost?

If you’ve been asked by your employer to work from home, then you are entitled to claim back some costs to cover additional household bills, like electricity.

You’ll be able to claim tax relief on £6 of income, which for a basic rate taxpayer is about £1.20 a week (about £60 a year). If you’re a 40% rate taxpayer this will be about £2.40 a week (£120 a year).

Impact on credit score and credit report

My credit report has not been updated yet. What should I do about it?

Lenders typically update the information they supply to us monthly, in line with your regular statement or agreed payment date. We can only change this information once your lender has told us about it, or with their permission.

Due to increased demand dealing with the impact of coronavirus, we’re experiencing delays getting some lender updates. This means it may take a little longer than usual to see any changes to your score or report. Please rest assured we’re working around the clock to do all we can to update your information. If you could bear with us before raising any queries about expected updates, we’d really appreciate it. Sorry for any inconvenience this may cause.

Is there anything I can do to protect my credit score, even when I’m struggling financially?

Lots of people have asked us how they can keep their credit score looking positive, even when they might be struggling financially. The most important thing to do at this time is make sure you know your income and outgoings, and you take advantage of all the assistance available to you. A good starting place is:

  • Make a budget – write down your income, including things like salary or benefits. Then write down all your expenses including debt, bills and living costs.
  • Speak to your lender – if you’re repaying debt on a mortgage, loan or credit card and might miss a payment then speak to your lender about the options available to you. Your credit score should be safe if you agree a payment holiday with your lender.
  • Register on the electoral roll – this can give your score a small boost, but it will help lenders identify you if you apply for credit in the future.
  • Limit your applications – Applying for lots of credit in a short space of time can reduce your score, so try not to apply for more than two things every three months.
  • Avoid late or missed payments – don’t ignore any payments you can’t make, and make sure you don’t cancel direct debits, or stop making payments before talking to the lender. Most lenders are offering support to people who will struggle to make their payments.

What can I do to improve my credit score?

We’ve received lots of questions about how to improve your credit score, and whether this can be done during the crisis. We know this will be important if you think you may need to apply for credit, for example a re-mortgage.

There are always things you can do you keep your score as positive as possible, depending on your circumstances. If you’re struggling financially then it’s a good idea to make sure you take advantage of any assistance you can get.

Here’s some things you can do to make your score as positive as possible:

  • Make sure you’re on the electoral roll – this gives your score a boost and can help future applications.
  • Don’t max out credit cards – lenders look at how much of your credit limit you utilise on a credit card. So, the closer you get to your limit, the more it could impact your score. Where possible try and keep the balance around 25% of the limit.
  • Look at how much you’re borrowing – as a general rule, the lower your total debt the better. If you are borrowing a large amount, think about whether you’re in a position to pay any balances down a little faster.
  • Space out applications – applying for more than two things in a three-month period can reduce your score. Try and avoid it before something important like a mortgage application.
  • Keep all your payments up to date – if you’re worried you’ll miss any payments because of Coronavirus, make sure you speak to your lender and take advantage of any assistance.
  • Bring accounts up to date – if you’ve got any outstanding debts or arrears (missed payments) then try and bring those up to date as soon as you can.

Does Universal Credit affect your credit rating?

Credit reports don’t include income details, whether this is from a salary or universal credit. So, receiving Universal Credit won’t affect your score.

Your credit score is influenced by lots of things such as paying your bills on time, how much you’re borrowing, how many applications you’ve made recently, and if you’re close to the limits on your credit cards.

It’s important to make regular payments on time, even when you start claiming Universal Credit, so your chances of being approved for credit in the future are not negatively affected. If using Universal Credit may mean you’ll struggle to do this, it’s a good time to speak to your lenders and see what support they can offer you as well.

Does an overdraft affect credit rating?

If you have an arranged overdraft the lender will share the limit and how much you’re using with the credit reference agencies. How much you borrow across all your accounts will be factored into your credit score. Additionally, going beyond your arranged overdraft limit can affect your credit score.

Does being a guarantor affect your credit rating?

If you’re a guarantor, you will be responsible for making the agreed payments if the account holder fails to do so. It’s a good time to check with the account holder and make sure they have spoken to the lender to discuss any forbearance they can offer. As long as a payment holiday is agreed the guarantor won’t be asked to pay.

How long do defaults stay on a credit report?

A default will stay on the credit report for six years from the original date of the default (not the date the account was opened). After six years it’s removed automatically and won’t be seen by lenders.