Missing Payments: How your debt is affecting your credit rating
If debt is causing you to miss the odd payment on your loan or credit card statement, it won’t do much harm. On the other hand, if this is a regular occurrence, then it could be a lot more serious.
What does missing payments do, exactly?
Missing payments entirely will send out warning signals to creditors to look into your financial history further. You will be refused credit and only considered for loans at a higher interest rate, as you will have proven to be a higher risk. Refusing to make payments will leave a stain on your credit rating which will be very difficult to remove. In addition:
- A history of late payments will remain on your credit file for 3 years whereas a CCJ or default will stay affixed for six years.
- If you went into bankruptcy as a result of reckless spending, you could expect a restriction order to stay on your credit record for up to fifteen years.
How YOU can stop missed payments harming your credit rating!
If debt hasn’t taken a hold and you genuinely do forget to make payments on time, direct debits are a great way to protect your credit record and keep your creditors happy, plus you can wave goodbye to late payment charges.
If debt really is the issue, you should contact your lenders immediately to work out a way of reducing payments. This is the stage where most people seem to go slightly crazy and start surfing the internet to apply for loans. All of these loan applications are recorded on your credit file which can indicate that you have hit hard times.
Instead of adding fuel to the fire by searching for loans, people simply need to consult with an organisation like the Debt Advice Trust who can give reliable financial advice. They will look at your financial situation in a calm and structured manner to find the best way for you to repay your debts. Best of all, this advice won't cost you a penny.
