PHOTO: MARIE-PIER MERCIER
Brigitte Bureau answers a question asked by several listeners. With the COVID-19 pandemic, many people are finding themselves having to delay some of their payments, and they are wondering if these deferrals will have a negative impact on their credit score.
The credit rating agencies assign us a credit score. This is done automatically based on the information sent by our financial institutions. Landlords may ask for a prospective tenant’s credit score, for example, to ensure the tenant’s ability to pay.
Experts advise you to raise the issue with your bank or credit union, says Brigitte Bureau, because they are the ones who send the information to the agencies. It is possible to negotiate with your financial institution to defer certain payments due to the pandemic.
In addition, requesting to consult one’s credit record has no impact on one’s credit score, contrary to what many people believe, since we have the right to consult it a certain number of times per year.
Assistance for Non-Profit Organizations
Brigitte Bureau wanted to mention some information from the Trudeau government that has been somewhat under the radar. Any NPO with a payroll of $50,000 to $1 million in the last year is eligible for a hardship loan during the pandemic to help pay for operating expenses.
If you repay the loan before December 31, 2022, you can keep 25% of the amount borrowed, says Brigitte Bureau. For example, if you borrowed $40,000, you can keep $10,000 if you pay it [RK1] back before December 31, 2022.
Trustee Pierre Fortin expects those in debt, after the 2020 respite, to find it difficult to keep their heads above water for the next several years. “People who have not been able to keep their jobs do not come out richer. Those who were in debt are now more in debt.”
Social assistance recipients are among the other losers of the pandemic. “These people were not able to benefit from CERB. Some have lost jobs that allowed them to survive,” explains François Décary of ACEF Appalaches-Beauce-Etchemins, referring to a client who was on social assistance and who supplemented his income by doing small household tasks for NPOs.
“Special benefits[JS2] like CERB are not a gift,” says Francine Hamel, budget consultant at ACEF Quebec. “These taxable benefits, by increasing income, will disqualify many people from support programs, such as legal aid or housing benefits.” These people will discover this in July 2021: that is when governments will have finished calculating the benefits and programs to which citizens are entitled. Read also
The various effects of the pandemic crisis on the personal finances of Canadians will be felt in 2021 or even in 2022, if we trust the conclusions of a study on the aftermath of disasters published in 2019 by the Urban Institute, an American NPO specializing in social and economic policy research. The study concludes that residents affected by a disaster, even those who have received financial assistance from the state, experience negative consequences on their personal finances in the medium term, including declining credit scores, difficulty in repaying debts, foreclosure, and bankruptcy.
In the short term, it’s the question of taxes (due April 30) that preoccupies almost all of the financial experts interviewed. According to a survey by Raymond Chabot, a third of respondents who received CERB did not set aside the amount needed to pay the associated tax. Among 18-34-year-olds, the proportion climbs to 50%. This just goes to show that even after the vaccine, COVID will continue to make waves in the personal finances of Quebecers.
Actress Sophie Bourgeois (L’Échappée, on TVA), for her part, assures us that she will not be going there again. She too had to resort to government aid, with her theatre projects, filming plans, and even a teaching contract having been cancelled in March. “A nasty slap,” said the 48-year-old actress. “My pride took a hit, but up we get.”
The mother of two children aged 8 and 12, who continues to rely on the Canada Recovery Benefit (CRB), is currently starting up television scriptwriting initiatives with producers and broadcasters. She vowed to herself that she would maintain her writing activities no matter what, even when business picks up again. “I don’t want to have to go through this anymore. It’s necessary to diversify. I will never just be an actress again.”
