Managing Your Credit Through a Financial Hardship

Blog Post03/18/2020
Credit Advice
Managing Your Credit through a Financial Hardship

COVID-19 has impacted lives all around the world, causing uncertainty in many parts of life. While we all continue to navigate this unprecedented situation, we want to assure you that we at TransUnion are committed to helping you understand how to protect and stay in control of your credit health during this time.

Our comprehensive guide here provides more information about how to protect your credit health, talk to your lenders and add a consumer statement to your report.

How you can protect your credit health

We understand that you may be facing some tough financial choices right now. We encourage you to pay what you can to avoid late payments on your credit report. If you can’t make minimum payments, we recommend you talk with your lenders to find out if they’re offering any assistance.

The Consumer Data Industry Association (CDIA), which represents the credit reporting agencies nationally, has provided guidance to lenders about how they can help give people a break on their credit during this difficult time. If a lender reports an account as in forbearance to TransUnion, it can help minimize the impact to your credit score and keep your accounts in good standing during the forbearance period, as long as you didn’t have late or missed payments already. Read our tips on how to talk to lenders about financial hardship below.

You can also protect and stay in control of your credit health by:

  • Adding a comment – called a consumer statement – to your credit report that describes your financial situation. This note needs to be 100 words or fewer (200 or fewer in Maine). An example of this note might be, “I am unable to make payments due to coronavirus.” Anyone who views your credit report will be able to see this statement. Visit to get started.
  • Checking your credit report to make sure all your account information is correct. You can get one free credit report each year from Then, if you contact your lenders to discuss your financial situation and/or account, they’ll have correct data.
  • Using free tools to help you keep track of any changes to your credit information and give you peace of mind. TransUnion offers a free credit protection product called TrueIdentity, which offers credit monitoring and alerts, your TransUnion credit report and credit lock.

How to talk to your lenders

Though not all lenders offer hardship or forbearance options, the CDIA has provided guidance to lenders about options for helping people during the coronavirus outbreak.

  • Contact your lender and explain your situation. You’ll find their contact information on your credit report or most recent bill.
  • You can ask when your lender reports late or missed payments to the credit reporting agencies. Some lenders may report late payments immediately, and others may wait up to 30 days.
  • Consider asking your lender whether they offer their customers hardship or forbearance plans. These questions might help you in your conversation with them:
    • Does your company offer a forbearance/hardship program?
    • What are the criteria to apply for forbearance or hardship?
    • Is there a difference between forbearance, deferral or hardship?
    • How long does it take for a forbearance/hardship to take effect?
    • Will fees (i.e. late, overdraft) be assessed while I’m in forbearance/hardship?
    • How is interest being calculated while I’m in forbearance/hardship?
    • How is my account reported to the credit bureaus while I’m in forbearance/hardship?
  • Find out how your lender will report your accounts to the credit reporting agencies.

How lenders may report your accounts during financial hardship

After talking to your lenders about your situation, you may learn that they will place your accounts in forbearance/hardship or deferral. These are common methods lenders use to report accounts to the credit reporting agencies.

Having an account in forbearance usually means your lender has agreed that you can temporarily stop making payments on that account for a certain amount of time. Typically, an account in forbearance won’t accrue interest.

A deferred account means the lender has agreed that you can delay payment for a certain amount of time, but the account will generally still accrue interest. Usually, this will show up on your credit report in the Remarks field with a comment that says “Payment Deferred.”

It’s important to know that having an account marked as “Payment Deferred” or in forbearance will not affect your Vantage Score 3.0 in and of itself. It may affect your other credit scores, and other factors could still affect your credit score while an account is deferred or in forbearance.

Additionally, if you made a late payment(s) or missed a payment(s) before your account(s) were in forbearance, that would still be reported and potentially have a negative impact on your credit score. Many factors impact your credit score, so while forbearance or deferment can help keep you from getting negative marks on your report due to missing payments, your score could still be impacted by increasing your balance on credit cards or other loan accounts, or by opening new credit accounts.

We know many people are feeling anxious about their finances during this challenging time. Organizing your credit information and maintaining communication with your lenders are two ways you can help stay in control of your credit health during times of uncertainty. In the meantime, TransUnion is here for you. We’ll continue to provide updates, tools and resources to help you keep your credit on track.

Disclaimer: The information posted to this blog was accurate at the time it was initially published. We do not guarantee the accuracy or completeness of the information provided. The information contained in the TransUnion blog is provided for educational purposes only and does not constitute legal or financial advice. You should consult your own attorney or financial adviser regarding your particular situation. For complete details of any product mentioned, visit This site is governed by the TransUnion Interactive privacy policy located here.