How does missing a payment affect your credit score?

Keeping up with your payments is an important aspect of healthy credit history. So even if you miss just one, it'll still leave a mark behind for future lenders to see.

What happens if I miss a credit card payment?

Whenever you miss a payment, points will be deducted from your credit score and other lenders will see this in the future. Unfortunately, this stays on your credit file for six years.

If this happens, then the best thing to do next is to start working on increasing your score.

One missed payment will make an impact but won't be too damaging. If you usually make all your payments on time and have a good credit history, then some lenders might overlook this.

However, if you repeatedly miss payments, then your credit score will continue to decrease. This could even lead to a County Court Judgement (CCJ) on your file. You'll have reduced creditworthiness and it could be difficult to take out a mortgage or loan in the future.

Why will it affect my score?

Making your payments on time every month will build up a positive picture of how reliable you are - this is what potential lenders want to see. Missing just one payment might not be too bad if the rest of your credit file is positive, although different lenders have different criteria.

If your credit file shows multiple missed payments, then lenders will be reluctant to lend to you in the future.

How do I know if I’ve missed a payment?

If you’re not sure if you’ve got any missed payments on your file then you should get your credit report from each of the credit reference agencies - Experian, Equifax, and TransUnion. You can check your Equifax report for free with CredAbility.

It's good to check them regularly to make sure there's no damaging mistake on there. If there are any mistakes, then you should contact the agency to try and get them removed from your report.

If missing the repayment is a one-off, you could write a 'notice of correction’ to the agency. This is only used in one-off cases and is attached to your credit report. For example, if you were diagnosed with an illness or became unemployed, this could be a good reason to write to the agency. Lenders are legally obliged to read this, but they don't have to take it into account. 

How can I avoid missing a payment in the future?

The best way to avoid missing payments is to set up a direct debit. This will help you stay on top of your finances and improve your score.

If your income is irregular and you don’t want to set up a direct debit, then you could pay your bills manually instead. Make sure to set a reminder on your phone or in your calendar, so that you never forget to pay. Some credit card lenders will email you when a payment is due, so find out if you can sign up for this service as well.

If you didn’t make your payment because you couldn’t afford it, then you could get free debt advice from an organization such as StepChange. They'll be able to offer various support depending on your circumstances.  

Read on here for more ways to get debt advice in the UK.

How can I improve my credit score?

By continuing to make the rest of your payments on time, lenders will see that you're a responsible borrower. Following this, your score should improve over time – providing you keep up good credit behaviour.

There are other ways to improve your credit score such as:

• making sure you’re on the electoral roll at your current address
• not using more than 30% of your total credit available to you
• avoiding any hard searches where possible
• not applying for too much, or any, credit.

If you do apply for new credit, make sure you use eligibility checkers before you make any applications, to reduce the chances of your application being rejected.

Learn more about how you can improve your credit score by reading here.