Deferring payments and your credit score

Last week the Canadian Bankers Association said they had 213,000 requests for mortgage deferrals and skip a payment options, but also cautions, that data is already a week old. And those numbers only apply to the big six banks.

As the first of the month is fast approaching, a new Angus Reid Survey suggests that 34% of Canadians are worried about making their rent and mortgage payments. And, 37% who have lost their jobs, don’t have an extra $100 to cover expenses.

Enter in deferring your mortgage and other debts to see if you can free up cash to get through this crisis.

 Deferring debts

Here’s some essential details to keep in mind if you’re thinking about deferring any of your debt:

  • If you tried your bank last week and got a “no”, try again. Banks are huge companies and it takes time for accurate information to make it to front line staff.
  • If your bank is working with you to defer payments, ensure you get the agreement in writing. If you can’t get it in writing, make sure you record all of the details of your call. Who did you speak to and when, what were the agreed to details? Then, email yourself the specifics so you have it in the future.
  • Keep in mind that deferrals are not a forgiveness of your debts. You still will have to pay them back and with interest upon interest.

Will deferrals hurt your credit score?

The short answer is that it “shouldn’t. For a more accurate explanation, I reached out to Julie Kuzmic, Director of Consumer Advocacy for Equifax and she said if your lender has clearly stated they’ll work with you and it’s a deferral, not a default, they should be registering it as such.  But that doesn’t always happen so make sure it’s a clear conversation with your lender.

Julie also suggests that you check your credit report regularly to ensure payments were reported properly.  But, wait at least 30 days because that’s at least how long it will take for your lender to report. Right now, Equifax and TransUnion are offering your credit report for free online.  The links were a little hard to find but they’re up on my blog post at

For more information, check out this excellent article:

And, my recent interview with BNN Bloomberg: