Martin Lewis warns mortgage holiday mistake could damage your credit rating
Money guru Martin Lewis has begged people not to take mortgage holidays into their own hands.
As part of an expansive and wide-ranging economic package last week, Chancellor Rishi Sunak announced banks would be providing "mortgage holidays" to people affected by coronavirus – meaning they would not have to pay back their monthly mortgage for a temporary period.
But on ITV's Good Morning Britain today, Martin issued a serious warning about applying for the scheme.
He said he had become aware of a dangerous trend among desperate people who felt like they could not wait to talk to their bank for mortgage relief.
“I heard this morning, as I’ve been sitting here, some people are simply cancelling their direct debits for their mortgage," he said.
“No! Don’t do that! You have to ask for a mortgage payment holiday otherwise it could affect your credit score.”
A poor credit score will seriously hinder your ability to apply for mortgages, credit cards, and even phone contracts in the future.
He continues: “There is so much going on in the financial world… when I speak to people in government they are re-writing centuries worth of policy during days.”
The MoneySavingExpert.com also urged people to not call the bank unless it is urgent, given the rise in calls they will be having to deal with during the pandemic.
He added: "Please, if your case isn’t urgent, if you’re asking for a mortgage holiday and it’s 14 days away, don’t do it now let the people who need it in the next week do it.
“Let the vulnerable people use the phone lines. Apply for things online if you can.”
Previously explaining how mortgage holidays work, Martin said the total you pay back each month will increase by a small amount after having a break of no payments.
During the financial insecurity brought about by the coronavirus pandemic, Martin has also discussed self-employment rights.
He also broke his "number one credit card rule" and admitted it might be helpful to move debts around if you can get a 0.00% interest credit card.
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