Consumers still struggling to pay back debts could see their credit scores damaged for the next six years, as protections are taken away this month for over quarter of a million people still on payment holidays.
Lenders have been granting three-month payment breaks since March and data from UK Finance shows 323,700 people were still using them for loans and mortgages as of the start of October.
But with the deadline for forbearance requests just days away, comparison website TotallyMoney is warning that borrowers must not be left out in the cold and says lenders must reassess how they treat borrowers before automatically adding missed payments to the debt which could push people into arrears.
Late payments and defaults will remain on credit reports for six years, TotallyMoney warns.
“With so many trying to make ends meet while protecting their health, the last thing anyone needs right now is more worry about how their finances could be affected further by these drastic changes,” Alastair Douglas, chief executive of TotallyMoney, said.
“That’s why it’s unfortunate that consumer credit scores will suffer for such a long time for anyone unable to keep up with their repayments.
“A lot has changed over the past three months, so a reassessment to see what more can be done to protect the public would be ideal.”
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