An Albury woman is urging people to seek legal advice before deferring home loan payments during the coronavirus pandemic after her credit rating was "annihilated" in just a few weeks.
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Sarah, who asked for her last name to be withheld, this week found her rating had dropped from 729 before Christmas to 199, likely leaving her unable to take out a planned car loan.
The 43-year-old had been left unable to work after being caught up in the recent bushfires on the NSW South Coast, and unable to leave the area.
Payments were deferred on her loan, which is through Aussie Home Loans and the Commonwealth Bank.
Her credit rating plunged hundreds of points over a six week period, with a credit report showing it dropped when the payments were deferred.
She said anyone looking to take such measures during the pandemic should be wary.
"People are looking for that assistance, they're being offered that assistance, and when you take it you don't realise it's detrimental to your credit rating because of new credit reporting laws," the 43-year-old said.
"Realistically you need to seek legal advice before going ahead."
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Advice on the Aussie and Commonwealth Bank websites state any arrears during a deferral period wouldn't be reported to credit agencies.
Sarah said most people didn't check their credit rating, but she kept an eye on it.
She had been looking to buy a new car, but believes the rating will stop her getting a loan.
"I've never had any judgements or defaults or anything of that nature," she said.
"I've got a mortgage and I've never had a problem with that.
"It takes pretty much your whole working life to maintain good credit.
"To have it destroyed in a matter of six weeks is awful.
"It's going to take me years to rebuild."
Sarah and her husband were unable to leave Shoalhaven for nearly four weeks during the Christmas period as the fires burned, in turn leaving them unable to return to work.
The pair had no choice but to defer their house payments.
A sudden death in the family compounded the issue.
"Unfortunately (COVID-19) is going to affect so many people who are desperate," Sarah said.
"The bushfires destroyed my credit rating.
"No lenders will touch me at all after this."
She is looking at what steps can be taken to remedy the issue.
Earlier this month Australian Banking Association chief executive Anna Bligh said banks would not report customers who took a six month deferral during the pandemic.
"If a customer is granted a deferral on their mortgage and other credit products because of COVID-19, banks will report customers as not having missed a repayment, provided they were all up to date when granted relief," she said.
"Australia's banks are here to support customers who have lost their jobs or significantly lost income because of COVID-19, through initiatives such as offering a six month deferral on mortgage repayments.
"Customers in these circumstances should not have to worry about their credit rating as well."
