Hardship Flags on Your Credit File

The Flag Almost Nobody Knows Exists

Since mid-2022, asking your lender to pause or reduce repayments — even briefly, even on a small debt — can put a financial hardship flag on your credit file. It doesn’t look like a default. It doesn’t look like a missed payment. It’s a small letter code sitting next to otherwise clean history, and most borrowers only discover it when a bank says no.

A vs V: What the Codes Mean

Financial hardship information (FHI) appears when a hardship arrangement is made on an account:

• “A” — a temporary arrangement: repayments paused or reduced for a period, with the loan expected to return to normal terms.
• “V” — a variation: the loan contract itself was permanently changed because of hardship.

While the arrangement is honoured, your repayment history keeps reporting as up to date — which is why the file can look green-ticked and still carry the flag. Three different layers can each trip a lender’s rules, and they age off on different clocks:

The 12-month window is the genuinely good news on this page: of everything that can mark a credit file, hardship flags heal fastest — an “A” or “V” flag is a short-lived mark, repayment history (RHI) sits for two years, and defaults for five.

How Lenders Treat Hardship Flags (July 2026 Policy)

• Macquarie (the most detailed rulebook): reviews hardship codes over the last 12 months, and wants acceptable conduct on all accounts over 24 months and 6 months of full repayments after the arrangement ends. On repayment history, one late code in 24 months might pass; a code of 2 or worse will not.
• ANZ: any hardship arrangement within the last 3 months is unsatisfactory account conduct (alongside 30+ day arrears, repeated late payments or dishonours, and payday-lender transactions) — a referral is possible with strong justification, but it’s uphill.
• Streamlined-refinance lockouts: hardship on your file in the last 12 months kills the fast-track refinance pathways at St.George/Westpac; NAB’s alternative-assessment refinance needs 12 months of clear repayment history; and Bankwest’s reduced-buffer exception needs zero missed payments in 12 months and no current arrangement.
• Most tolerant: Pepper and Resimac have no explicit hardship-flag auto-decline — their tier system absorbs conduct issues. Brighten’s standard Near Prime is fine with flags; its streamlined product wants 12–24 months clean.

Wait, Fix, or Go Specialist?

Three honest routes, in the order we’d usually recommend them:

1. Wait it out. Flags vanish from view after 12 months, and most bank rules only look back that far (plus a clean-conduct buffer after the arrangement ends). If your timeline allows it, waiting keeps you at mainstream pricing — like it did for Kate.
2. Fix what’s wrong. If a flag was recorded when you never actually entered an arrangement — you asked a question and got flagged — dispute it with the lender and the bureau. And because one bureau can be clean while another is flagged, check all three before assuming you’re blocked.
3. Go specialist (deliberately). If you can’t wait — the purchase is now, or the refinance saves real money — specialist lenders will assess you on the story. Treat it as a stepping stone and plan the refinance back to mainstream for the month your flags age out.

One myth worth killing: COVID-era deferrals were handled under special reporting arrangements — a repayment pause from 2020–21 is not sitting on your file as a hardship flag today. FHI reporting only began in mid-2022, and nothing older than 12 months is visible anyway. If a lender knocked you back over “hardship”, make them show you what they’re looking at — declines are often vaguer than the rulebook.