MILLIONS of Brits could find borrowing more expensive because of the damage done to credit scores during the Covid-19 pandemic, a new report warns.
A customer with a strong credit rating who has dropped to a poor one would face paying £2,690 a year extra on any new borrowing, research by Credit Karma claims.
It claims people may find their credit scores hit if they apply for more cards or loans or default on credit agreements during the coronavirus crisis.
The company estimated that in April nearly five million expected to be unable to make repayments in the following weeks and months because of the pandemic’s affect on their finances.
Rising unemployment as the furlough scheme ends could make things worse, it was estimated.
Even if a credit score recovered to a medium rating it would still mean paying £740 a year extra in charges.
