Deferred Mortgage Payments: A Credit Score Gamble?

Last week, the President of the Canadian Bankers Association announced that all six major banks would offer deferral payments on their mortgages and other credit products. Equifax recently announced that the lender would take actions on its system to ensure that it does not report any derogatory/missed payment information to the credit bureaus that is misaligned with the program it has implemented. Financial professionals have been posting messages online and sending emails to reassure the public and their clients that a deferral payment will not affect their credit score. However, many financial professionals have been bombarded with phone calls that have put pressure on their personal and electronic systems. Are Canadians willing to gamble their credit score and assume that every lender has updated its reporting system?

Millions of Canadians have found errors in their credit reports. The amount of deferred payments over the coming months is unprecedented, leading to an increase in the amount of mortgage, loan and credit card payments reporting incorrectly on Canadian credit reports. Even with the chance that a deferred payment will show up as a late payment, many Canadians will still need to take advantage of such programs being offered by banks. It is important to wait until necessary, as a deferred payment is not free money and will have to pay the lender back with interest. However, the credit scoring system will not show much sympathy for any late payments during the COVID-19 pandemic. On average, one late payment will drop your score 20 points.