Struggling with a loan repayment? New credit reporting changes will protect Aussies in financial hardship

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on June 28, 2022 Fact Checked
Struggling with a loan repayment? New credit reporting changes will protect Aussies in financial hardship

From 1 July 2022, credit reporting changes will come into effect protecting the credit history of consumers who are in financial hardship.

Consumers who agree to a financial hardship agreement with their lender for a personal loan, home loan, car loan, or credit card will have their repayment history safeguarded through a special payment arrangement. 

This arrangement will be implemented for a period of time set by the lender. 

It is important to note that the credit report will not include the reason for the consumer entering the hardship agreement nor the specific details of the agreement. 

Australian Retail Credit Association (ARCA) chief executive officer Mike Laing said financial hardship shouldn’t be perceived as a reflection of poor credit management.

“Covid-19 and natural disasters such as floods and bushfires have demonstrated that financial hardship can affect anyone at any time,” Mr Laing explained.

“Entering a financial hardship arrangement can help prevent missed payments being recorded on your credit report - it’s actually a good sign that you’re engaging with your lender and seeking to get back on track.

“Importantly, financial hardship arrangements can give customers the breathing space they need during difficult times and prevent the account going into default, or a default being recorded on their credit report.”

What impact will the changes have on a credit report?

A consumer’s credit report currently contains a 24 month history which reflects how reliable they are in making debt repayments and paying bills in a timely fashion.

If a financial hardship arrangement is put in place, the credit report will reflect the revised repayments agreed with the lender, not the original repayments. If the consumer meets these new repayments, their history will show that repayments are up to date.

In the case where a consumer is temporarily required not to make payments under the hardship arrangement, this will also be reflected in the credit report.

When calculating a consumer's credit score, credit reporting bodies are restricted from including the financial hardship indicator.

What about accessing credit in the future?

During or within 12 months of the end of your financial hardship arrangement, lenders will have access to your credit report that states you have been in financial hardship. 

When applying for a new loan, Mr Laing reassures consumers that hardship arrangements should not stop them from applying for credit in the future. 

“Seeking hardship assistance from your lender does not exclude you from applying for credit in the future,” he said. 

“Depending on how recently your hardship arrangement ended, new lenders may ask for a few extra details to get a better idea of your current circumstances to understand whether you are still experiencing hardship and if this will affect your capacity to take on new credit.”

After 12 months, financial hardship information is deleted from credit reports. 

“Getting help early can help avoid the problem getting worse and better enable the lender to work with you during tough times to help you get back on track,” Mr Laing said. 


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Hanan joined Savings.com.au in 2022 as a finance journalist. With a keen interest in home loans, property investing, and money saving tactics, she is passionate about educating young Australians, like herself, on all things finance.

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