Several credit reference agencies (CRAs) have confirmed their new guidance to minimise the impact to the credit reports of UK businesses during the Covid-19 pandemic.

Lenders can now offer an ‘emergency payment freeze’ to businesses that may be worried about meeting regular payments because of the pandemic.

Once agreed, lenders “should not report” a build-up of arrears to four designated CRAs – Experian, Creditsafe, Dun and Bradstreet, and Equifax – which Experian suggested would ensure the impact to business credit reports will be minimised.

In line with the latest FCA guidance, Experian added that organisations would be expected to act in the “best interests” of their customers and show “greater flexibility” during the ongoing coronavirus situation. Lenders are expetced to decide whether to offer affected businesses the emergency payment freeze based on their circumstances.

The latest guidance covers both the voluntary Credit Account Information Sharing (CAIS) and the Government’s mandatory Commercial Credit Data Sharing (CCDS) scheme, which covers Current Account Turnover (CATO) data as well as credit accounts.

If a business falls behind on their payments without agreeing a payment freeze, including cancelling their direct debits, Experian indicated the usual reporting position from lenders will apply.

Experian chief data officer, Jonathan Westley, commented: “Businesses around the country have been forced to put their growth plans on hold and go into survival mode. It’s vital they get the support they need to survive the pandemic and our industry has an important role to play.

“The emergency payment freeze for businesses will help them to navigate the period when they are most stretched. Businesses need to know that cancelling direct debits won’t solve their problems.

“Now is the time to speak to your lender and discuss the most suitable arrangements for your business, including the emergency payment freeze which will minimise the impact on business credit reports.”

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