If I accept a hardship program from a credit card company what will be listed on my credit report and how will that listing impact me?
Chick Eboi

Answer:

Chick,

How the credit card is reflected depends upon the status of the credit card. These items will be listed on your credit report as “negative” items.

• Late Payments
• How Many Days Late (if payments were 30,60 days late, for example)
• Closed by Creditor (if the card is closed as part of accepting the hardship program)

As far as I know, there is not a specific notation on the account indicating that you are taking part of a hardship program, so that in itself will not be reflected negatively. The creditor may note that you are making payments or an arrangement has been made which could be a red flag to your other creditors. Usually though, the account is closed and the hardship program is a means of allowing you to make payments that suit your situation better. Your payment history will continue to appear on your report either way, so making your payments on time and consistently can’t hurt as it does show that you’re attempting to pay your debt.

If the credit card stays open and you pay on time without missing payments, it will actually be a positive item on your credit report. Again, unless there is a special note added that you’ve made a special arrangement. I would check with the credit card company to find out exactly what will show up on your credit report from that particular bank.

Keep in mind though that with hardship programs it’s very important to make sure you don’t miss any payments or are late. Defaulting could result in losing the hardship status and reverting back to your original terms of payment, which if you can’t pay will go to collections and is a definite negative item on a credit report. Consider your alternatives. If you cannot make your credit card payment without the hardship program, it will be worse for your credit report than if your card company does include any note about a payment plan.

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