Financial hardship information FAQs

What is a financial hardship arrangement?

From 1 July 2022, financial hardship information about you can be reported under the Privacy Act 1988 if you enter into a financial hardship arrangement with your lender (also known as a credit provider).

Financial hardship information will be reported when an individual is experiencing financial difficulty, and the credit provider and individual have put in place an arrangement to change an individual’s repayment obligations.

You can request to enter into a financial hardship arrangement, or your credit provider can offer you this arrangement.

There are different types of financial hardship arrangements – they can be temporary in nature (referred to as temporary FHA) or permanent in nature (referred to as variation FHA).

Your credit provider will make it clear to you when you are entering a financial hardship arrangement.

During the financial hardship arrangement, your credit provider will report your repayment history information against the arrangement.

Is financial hardship information included in my credit report?

Financial hardship information is included in your credit report and is reported alongside your repayment history information.

Your credit report will display an indicator to show the type of financial hardship arrangement that has been put in place. Learn more about the different types of financial hardship arrangements.

When a credit reporting body gives you access to your credit report, it must tell you if it includes financial hardship information about you and explain the type of financial hardship information that is included.

What will financial hardship information look like on my credit report?

If you enter into a financial hardship arrangement with your credit provider, your credit report will show this arrangement.

This will be done by a hardship indicator displaying next to your repayment history information in your credit report.

Your credit report will not show the details of the financial hardship arrangement or the reasons why you entered into the arrangement. Your credit report will only show the type of financial hardship arrangement that is, or has been, in place, for a period of 12 months.

A temporary financial hardship arrangement will show as an ‘A’ on your credit report. An ‘A’ will be reported for each month that the temporary FHA is in place.

During a temporary financial hardship arrangement, a credit provider can only report your repayments as either:

  • received on time which will appear as a ‘0’ on your credit report, or
  • overdue which will appear as a ‘1’ on your credit report.

The credit provider cannot record any other numbers on your credit report, despite the number of days that a repayment is overdue.

During a temporary financial hardship arrangement, your credit report might look like this:

Financial Hardship table 1

A permanent (or variation) financial hardship arrangement will show as a ‘V’ on your credit report. The ‘V’ will only appear once on your credit report – when the arrangement is first put in place. Repayment History Information is then reported against that varied arrangement.  It might look like this on your credit report:

Financial Hardship Table 2

How long will financial hardship information show on my credit report?

Financial hardship information (the V or A indicator) will remain on your credit report for 12 months.

After this date, the credit reporting body is required to delete this information from your report.

Does a financial hardship arrangement affect my credit score?

No.

A credit reporting body is not allowed to use your financial hardship information to calculate your credit score. This is prohibited in the Privacy Act 1988 and the Privacy (Credit Reporting) Code 2014.

The credit reporting body must explain this to you when providing you with your credit score.

How do I enter into a financial hardship arrangement?

If you are struggling to meet your repayment obligations, you should consider contacting your credit provider and asking to discuss your options for a financial hardship arrangement.

Alternatively, you can contact a financial counsellor for their advice.

You can find more information on financial hardship at moneysmart.gov.au, which is a Government website operated by the Australian Securities and Investments Commission (ASIC).

When do the financial hardship provisions commence?

The financial hardship provisions commence on 1 July 2022.

A financial hardship arrangement is made when you and the credit provider agree to the arrangement, not when the hardship request is made.

However, the commencement date of a financial hardship arrangement can be backdated to the day that you requested the financial hardship arrangement. This can occur if the credit provider has unreasonably or unnecessarily delayed agreeing to the arrangement.

A financial hardship arrangement may also be backdated where:

  • The credit provider considers that a backdated date more accurately reflects the date the arrangement should have commenced, or
  • You were unable to make a hardship request earlier due to unavoidable circumstances beyond your control, such as illness or a natural disaster. In this case, you should ask the credit provider if they can backdate the commencement date of the financial hardship arrangement.

What do I do if I have a complaint about the reporting of a financial hardship arrangement?

If you have a complaint about how a financial hardship arrangement is appearing on your credit report, or the activities of a credit provider or credit reporting body, you can make a complaint.

You can also request that a credit provider or credit reporting body correct your personal information. You can do this if you think that the information is not accurate, that it is out of date, incomplete, irrelevant or misleading.

You should complain to the credit provider or credit reporting body first, to see if they can resolve the issue for you. If you are not satisfied with the response received, you can contact the external dispute resolution scheme applicable, for example the Australian Financial Complaints Authority (AFCA). Otherwise, you can contact the OAIC.