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

Written by:
'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.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

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.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week