Protecting Your Credit Score Through COVID-19

Erik Sepper • March 31, 2020
Personal finance is undoubtedly on the minds of most Canadians. For a lot of us, incomes have been reduced, but living expenses remain the same. 

The full economic impact of the COVID-19 Pandemic is still uncertain. Unemployment is skyrocketing, people are social distancing, self-isolating, and businesses are struggling to stay afloat. At the writing of this article, over 1 million Canadians have already applied for EI. 

However, the federal government has just announced several new programs designed to help those individuals, families, and businesses whose employment has been impacted by COVID-19. If you meet the qualifications for assistance, you should apply. 

Now, if you're looking to make sure your credit score isn't hurt during these times, here is some basic advice. The key to managing your credit is to stay on top of your payments. If possible, always make at least the minimum payment on your credit cards and line of credits. Keep making payments on your instalment loans, car payments and the payments on your mortgage. 

If you find yourself getting behind, this isn’t the time to put your head in the sand, instead, make contact with your lenders. Everyone is going through tough times, lenders understand this and have programs in place to help. Chances are, they will be able to reduce your payments, defer your payments, or even consolidate your debts. 

Missing payments without communicating with your lender is not an acceptable way to defer payments. This won’t be looked upon favourably and your credit will be damaged as a result. 

So, at this very moment, if you’re behind on any of your payments, and you have the means to pay, right now would be a good time to go and make at least the minimum payment. Or to contact your lender and make payment arrangements, communication is everything. 

Mortgage lenders have announced their contribution to easing financial stress is to offer mortgage payment deferrals for up to six months. And although this will be an excellent option for some to provide immediate financial relief, it might come with some unforeseen challenges down the line, credit misreporting being one of them. 

The truth is, you won’t be penalized for restructuring or deferring your mortgage payments. Still, if your lender’s system isn't correctly adjusted, there’s a good chance something will misreport to the credit agencies and this could lower your credit score. This is true of credit cards, loans, car payments, and mortgage payments. 

So, if you do find yourself having to make special arrangements with your lender or you want to defer your mortgage payments, here is a list of things you should consider doing:

  1. Request written confirmation (email is fine) of the new terms. Get everything in writing. Although it’s probably easiest to call into your bank, things get missed in conversations, having everything in writing is best for you!
  2. Make sure you record who you have been talking with, along with the date and time of any conversations. Keep minutes for yourself.
  3. Track your credit score on Equifax and Transunion after the new arrangements are in place.
  4. If you see any discrepancies, contact your lender immediately, and open a dispute with the credit reporting agencies.

Do your best to keep on top of your payments, make arrangements if you can’t. In time, this will pass. If you’d like to discuss mortgage options, please don’t hesitate to contact me anytime. We’re all in this together!

ERIK SEPPER 
MORTGAGE AGENT

CONTACT ME
By Erik Sepper July 29, 2026
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