Does deferring payments during the pandemic affect your credit score?

TORONTO -- During the COVID-19 pandemic more than three million Canadians took advantage of deferred payments to help with financial issues.

According to Equifax, last year there were 900,000 deferred mortgages and 1.2 million deferred credit card payments. 

These deferral programs have been winding down and payments are now getting back on track. 

Deferred payments are not supposed to have an impact on your credit rating or score, but it could if a lender records a payment as missed or late instead of deferred.

Equifax Canada said it worked with lenders to implement reporting guidelines to make sure payments were not reported as late.

“They were reporting them as paid as agreed, because that's technically what they were. The lender had made an agreement with the consumer that it was okay not to make a payment for some period of time," said Julie Kuzmic, Director of Consumer Advocacy with Equifax Canada. 

There have not been widespread problems, but there is a chance that some lenders could have mistakenly reported a deferred payment as late. 

If they did, an error can have a lasting impact on your credit rating and score. 

“Even a small error on your credit report can have a huge impact on your credit score and in terms of trying to get credit cards, a mortgage, or even a student loan, that can be the difference between getting a good rate, a bad rate, or no loan at all,” said Lisa Gill with Consumer Reports.

Unfortunately, errors on credit reports were happening even before the pandemic, which is why it's important to check your credit report at least once a year or if you are expecting to apply for credit.

Equifax now allows you to check your credit rating and score online for free.

If you find a mistake, you should takes steps to correct it right away.

“If anyone does see anything that doesn't seem right there is lots of information on our website about how to find those deferred payments on your credit file to make sure they do look accurate and if not what you can do about it," said Kuzmic. 

Errors should be addressed with both credit reporting agencies Equifax and TransUnion. Correcting errors can take time and you may have to send supporting documents so you may need to check back several times to confirm errors have been fixed. 

Even if you didn't use deferred payments it's still a good idea to check your credit rating and score. 

Equifax says when you check your own credit information there is no impact on your score number.