Payment holidays and your credit score
If you are considering a payment holiday, you should understand whether this decision would affect your credit score.
The pandemic led to many lenders offering payment holidays to their clients. If this is something you are considering, you should understand whether this decision would affect your credit score.
The great thing about payment holidays is that it generally helps to keep your credit score in good shape. By extending repayment dates, it might mean less missed payments, and therefore a better score. The downside is that you will end up paying more interest in the long run, so you should consider all your options before making a decision.
Every lender is different – so you should check to see how they report the payment holiday and whether it’ll affect your score.
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Isabelle is a freelance finance writer and journalist in Cape Town. She helps make managing your personal finances calm, clear and easy to understand.