Experian said that payment holidays can be a feature of a lending product, or where the lender chooses to offer a payment holiday in exceptional circumstances outside of the customer’s control.
It outlined that during this payment holiday the account should not be recorded as having any form of detrimental arrears.
Furthermore, the credit agency said that should a lender agree to offer forbearance or a payment holiday to a borrower, it expects a lender to report a status code ‘U’.
This would not result in a negative impact on a consumer’s credit score.
A spokesperson for Experian, said: “It is not uncommon for organisations that provide information to the credit reference agencies to allow forbearance, or a payment holiday at times of illness.
“However, it is down to each organisation to decide how and if they wish to allow any forbearance and at what stage.
“It’s important to avoid missed or late payments that may negatively impact your credit score.
“So, whatever the reason, you must always agree a payment holiday with the lender first. If the lender agrees to a payment holiday, they will update credit reference agencies with the correct information.”
