Home loan customers will not have their credit file marked with an adverse rating if they lose their jobs and have to ask their bank for repayment deferrals because of the economic crisis.

The Australian Banking Association (ABA) has announced that bank customers applying for payment deferrals will not have a missed payment or hardship flag appear on their credit file.

This approach to credit reporting means that banks will not notify credit reporting bureaus of a customer’s missed repayments during the deferral period.

This will give consumers peace of mind when entering into loan deferrals with their banks as their credit rating will not be negatively impacted.

Fiona Guthrie, CEO of Financial Counselling Australia says financial counsellors are getting questions from clients about the impact of virus-related hardship on credit reporting scores.

“The ABA announcement puts the matter firmly to rest when it comes to interacting with the banks and we welcome it strongly,” she says.