Your credit report includes your repayment history for credit accounts like credit cards, home loans, personal loans, and car loans. This has been part of mandatory reporting from 2018 and can greatly affect your Credit Score.

From 1st of July 2022 there have been some changes to how your credit report will look if you agree to a financial hardship arrangement with your lender for a credit card, personal loan, car loan or home loan, by way of a new type of indicator on your credit report, flagging that a special payment arrangement is in place for a period due to financial hardship. The credit report will not include the reason for the hardship arrangement or the details of the arrangement.

You will notice on your credit file from now that it will either state that you are not in a financial hardship arrangement, or if you are, it will show whether that arrangement has been met on time. This will be described as FHI (Financial hardship Indicators) and will be included with your current RHI (Repayment History Indicators).

A financial hardship arrangement is an agreement between you and your lender to adjust your credit card, personal loan, car loan or mortgage loan repayments because something has happened which has an impact on your ability to repay.

A payment deferral because of a change in your financial circumstances such as being unable to meet regular payments because of illness or relationship breakdown, decline in income or natural disaster where the credit provider agrees to a period of smaller payments a pause with repayments or an extension for time to make the repayments.

A financial hardship arrangement is usually for a short period of time, for example, reduced payments for a couple of months. However, in some cases, it can be longer, e.g., an extension of the remaining term of the loan to reduce the monthly repayments.

Previously, if you had a financial hardship arrangement, it was not reported on the system that this has occurred. It would show up as an ‘R’ or a ‘0’ and in some cases (though it was not supposed to during any notice of hardship) it would come up as a missed repayment.

Since the 1st of July 2022, it’s going to look a bit different. Financial Hardship information will now be noted on the credit report under the Repayment History Indicators (RHI). If your credit provider agrees to a financial hardship arrangement, it will show.

  1. That the repayment arrangement is current and up-to date with either a ✔ or a ‘0’
  2. A ‘flag’ alongside the repayment history information, that will show that a payment arrangement was in place at the time.

The flag in the credit report will be referred to as ‘financial hardship information’ and can take two forms depending on the type of arrangement:

  • ‘A’ – There was an arrangement for the month that temporarily deferred some or all your repayments (which will need to be repaid later or be subject to a further arrangement).
  • ‘V’ – The loan was varied in this month to reduce your repayments. This could be either for a short term (for example, reduced payments for three months) or long term (for example, extending the remaining term of the loan; waiving some of the debt etc).

The financial hardship information ‘flag’ will only stay on your credit report for 12 months (compared to repayment history information itself which stays for 24 months). See the example below:

Credit Report Changes - July 2022

How the Credit Reports will change in July 2022 – We Fix Credit Explains

These changes also include some important protections for you as a consumer which is a positive note. The financial hardship information cannot be used by a credit reporting body to calculate your credit score (whereas regular repayments that you may miss outside a hardship arrangement does impact your credit score). Also, a lender can’t cancel any existing credit card limit just because your credit report includes financial hardship information.

More than ever, it will be something you will need to monitor by checking your Credit Report with all three Credit Reporting bodies. This will ensure that you can dispute any errors that may be noted on your report.

If there is something that you notice that is not correct, you can dispute this directly with the Credit Reporting bodies or with your credit provider or you may choose to seek professional assistance from We Fix Credit to repair your Credit Report. We Fix Credit offers many different options for credit fix solutions to repair your report and can give you a detailed consultation FREE of charge, so that you can understand your credit report and get some helpful tips about credit repair.