If you’re finding it hard to make your consumer credit payments (for example, because of illness, unemployment or changed financial circumstances) your credit provider may be able to help. They may be able to change the terms of your consumer credit contract to allow you to pause or reduce your payments for a period of time.
Such a hardship request comes under the National Credit Code (set out in the National Consumer Credit Protection Act 2009) and any affect to your credit report is explained below. However, if your hardship request results in a financial hardship arrangement with your credit provider this comes under the Privacy Act 1988.
To find out if you are eligible for financial hardship assistance, contact your credit provider.
Is a request for hardship assistance recorded in a credit report?
If the credit provider accepts your application, they must not disclose this to a credit reporting body.
If your application for hardship assistance results in:
- a change in the terms and conditions of your consumer credit
- your existing credit being terminated, or
- you being given new consumer credit
information about that variation, termination or new credit may be recorded in your credit report but not that it was the result of your application for hardship assistance.
Can a default be recorded in your credit report once you request hardship assistance?
If you apply for hardship assistance, a credit provider isn’t allowed to record a default on your credit report:
- while they decide about your application for hardship assistance
- until 14 days after they told you they have refused your application
However, a credit provider may record a default if they reasonably believe that you made your application for hardship assistance for the same reason as an application made during the previous four months.
A credit provider must not tell a credit reporting body about a default if you followed the terms of your hardship assistance.
For more information about financial hardship assistance, visit MoneySmart