Canadians struggling to keep up with credit payments may fear that delayed or deferred payments could lower their credit scores. The public declarations of Equifax and Transunion, Canada’s two major credit evaluators, make it clear that their ratings will continue to reflect the information provided by lenders.

Both firms emphasize the importance of dealing directly with creditors to completely understand the terms and conditions of any payment deferral or reduction during the COVID-19 emergency. And both say their ratings result from primarily objective formulas, driven by amalgamated input from lenders.

“We understand that people are concerned about how deferred payment and other special arrangements may affect credit scores,” Equifax notes on its COVID-19 information page (as of April 14). “We are working together as an industry to help minimize any negative impact on credit standing while maintaining the data integrity that underpins our ecosystem. The specific details continue to evolve and we will share more information as the plans are finalized.”

In its Q&A format discussion about the impact on credit scores, TransUnion notes simply that “it is up to lenders to decide how they’re going to report accounts to credit reporting agencies,” and that “late or missed payments may be reported by your lenders to the credit reporting agencies, and the timing of reporting varies by lender. We recommend contacting your lender directly to ask about when late or missed payments are reported.”

Equifax takes one additional step, noting that the effect of COVID-19 on credit standings can be minimized by adding a 400-word “consumer statement” to credit reports. These files can be added to credit files and included each time a file is accessed. TransUnion makes no reference to such a facility.

“Your payment history is typically the most important aspect of your credit score,” according to information on Transunion’s site. It also discloses the algorithmic formulation of its scores. “To calculate a score, numerical weights are placed on different aspects of your credit file and a mathematical formula is used to arrive at a final credit score.” Equifax’s site estimates that payment history is the largest factor in its scoring models, with a typical weight of 35% of the overall score.

Credit scores are a numerical assessment of the risk of lending. All lenders use scores as part of their evaluation of whether to lend, how much to lend and at what rate. Every consumer’s history of borrowing and repayment is used to derive a score on a 300 to 900 scale, with higher scores indicating a better history and lower risk. Each service actually provides many different ratings based on different elements of a credit history, and lenders may have access to more than a single number for any potential borrower.