I'm in hardship, how does it affect my credit report?
Financial hardship arrangements interact with your credit file in specific ways. Here is how.
This guide helps you
- Understand what a hardship arrangement is
- Learn how hardship can appear on your credit report
- Know the steps to request hardship support
- See how it differs from simply missing payments
- Find free help to arrange it
6 min
What's happening
If you cannot meet your repayments due to financial hardship, such as illness, job loss or reduced income, you can ask your lender for a hardship arrangement. This might pause or reduce payments for a time. How hardship is recorded on your credit report is governed by specific rules, and there are protections around repayment history information during an arrangement. The detail can change, so check the current rules.
Your first steps
- Contact your lender early, before you fall badly behind.
- Explain your situation and ask about a hardship arrangement.
- Ask specifically how the arrangement will be reflected on your credit report.
Step by step
- Request hardship assistance from your lender, in writing where possible.
- Provide any information they reasonably need about your circumstances.
- Agree on an arrangement and get the terms in writing.
- Ask how repayment history and any hardship indicator will appear on your file.
- Keep up the agreed reduced payments and keep records.
Watch out for
Ignoring the problem and simply missing payments can lead to defaults and worse outcomes than a managed hardship arrangement. Do not pay a third party to 'arrange hardship' for you; lenders deal with you directly, and free financial counsellors can assist. Always confirm in writing how your file will be treated.
Where to get free help
A free financial counsellor on the National Debt Helpline (1800 007 007) can help you request hardship and understand the reporting impact. If a lender will not assist fairly, you can complain to AFCA for free. See the directory of bodies for support, or read more at Merion Help.
Key takeaways
- You can ask your lender for a hardship arrangement when you cannot pay.
- Specific rules govern how hardship appears on your credit report.
- Acting early generally beats simply missing payments.
- Free financial counsellors can help you arrange and understand it.
Frequently asked questions
Will asking for hardship hurt my credit report?
There are specific rules and protections around how hardship and repayment history are recorded. Ask your lender how it will appear, and check the current rules.
Is hardship better than just missing payments?
Generally yes. A managed arrangement can avoid defaults and worse outcomes that come from simply falling behind without contacting your lender.
Do I need to pay someone to arrange hardship?
No. You deal with your lender directly, and a free financial counsellor can help. Avoid paying third parties for this.
This is general information, not legal or financial advice. Your situation is unique and rules can vary by state and over time — for advice on your circumstances, speak to a free financial counsellor (National Debt Helpline 1800 007 007) or get legal help.
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