How do credit holidays affect credit history?

Credit history is a record containing information about all of the Borrower's credit obligations: which banks and financial institutions they applied to, what amounts they borrowed, how carefully they repaid their payments, and whether there were any delays. The more impeccable the client's reputation, the easier it is for them to obtain a loan next time.

If you apply for credit holidays, this is also reflected in your credit history. Such a deferral harms your reputation as a Borrower. The bank perceives it as a signal of instability in your financial position. For the bank, this is a risk, so upon subsequent applications you may be denied a loan or offered a higher interest rate.

Our advice is to use deferrals only as a last resort. If the situation is not critical and there is a possibility to reduce other expenses, continue repaying the loan. This way you will avoid the negative impact of credit holidays on your credit history.