I’m worried one missed credit card payment will damage my credit score

0
Written by:
03/04/2017
'I accidentally missed a credit card payment. I realised it was a week overdue and paid the full amount straightaway. This is the first time I’ve missed a payment. Will it affect my credit rating?'

It’s natural to worry about a missed credit card payment, whether it was done accidentally or because you didn’t have the funds.

Missing just one payment can have a negative impact on your credit score, which is what lenders use to work out how likely you are to repay a debt on time, and is based on your credit history.

The higher your credit score, the greater chance you have of getting the best credit card deals.

The bad news is that a small blip on your credit score could impact your eligibility for credit products in the future, including mortgages.

The good news is in this instance you acted quickly and paid the full balance as soon as you realised your error.

James Jones, consumer expert at Experian, one of the biggest credit check firms, says: “If you miss a payment once, this will have an impact on your credit score, but if it is just a one off, you can recover quickly.

“Credit scores weigh up lots of different pieces of information, not just your late payments. If everything else on your report and application form is favourable, it won’t necessarily be a deal breaker.”

Although you acted quickly, Nick Hill of the government-backed Money Advice Service suggests speaking to your provider.

“Explain the situation and check whether they have notified the credit agencies of the late payment.”

You can also add a ‘notice of correction’ to your account, which is a 200 word statement explaining why the payment was late. This is visible to lenders so they can see the problem was a one-off and has been corrected.

Jones recommends checking your credit report in six weeks’ time to see whether the card provider has registered the late payment as sometimes minor misdemeanours don’t hit your report. You can use sites such as Experian, Clearscore or Noddle to do this.

Alastair Douglas, chief executive of TotallyMoney.com, a credit card comparison site, says that repeated missed payments “will act as a red flag for lenders”.

If you missed a payment because you didn’t have the funds, don’t bury your head in the sand. Talk to your provider and try to come up with a repayment plan to suit both parties. This may include suspending your card until the balance is paid off.

How to ensure you don’t miss a payment again:

  1. Set up a monthly direct debit. If you’re unsure how to do this, ask your credit card company for help.
  2. Select a payment date that is suitable for you, such as just after pay day.
  3. Diarise your payment date in your phone or on your calendar.
  4. Consider transferring your balance to a card that offers additional tools for managing repayments, such as the Halifax FlexiCard which allows card holders to set up monthly instalment plans.

For 10 ways to boost your credit score, click here.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

After an award-winning health insurance provider?

Winner of best online health care provider in the YourMoney.com Awards 2015

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2176588-young-male-driver
Cost of getting young drivers on the road falls

Spending less on a first car combined with lower insurance premiums has seen the cost of driving for young people...

Close