Missed payments: how long do they stay on your credit record?

by John Fitzsimons on 14 August 2012  |  7 comments
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Guest blogger Darren Beach of Experian looks at how long your credit record suffers for if you happen to miss a payment

Most of us have known at some point the creeping realisation dawning on us that we have forgotten to pay our credit card bill on time. Or perhaps seen the ‘red bill of doom’ lying on the doormat when we come back from holiday, to tell us that the gas bill is overdue. Some may find that their regular mortgage payment was rejected due to lack of funds.

We all know that missing a payment is bad news for our credit record. But just how long-term is the damage?

The first thing to note is that missed payments are recorded on your credit report for at least six years. Court Judgments for non-payment of debts, IVAs and bankruptcies also stay on your credit report for at least six years and can be seen by lenders.

Why does a missed payment stay on my credit record for so long?

This is because lenders want to check your credit report to judge for themselves whether or not they think you are likely to keep up payments on any credit they give you.

If they see late or missed payments on credit agreements with other lenders, they may worry that you might miss payments to them too. They want to be sure that you aren’t taking on more credit than you can comfortably manage.

You may still get credit

Even if late payments can affect your credit score, it needn’t stop you from getting credit. You may still be eligible for credit, but it might cost you more to do so as the most competitive deals may now be out of reach.

A single late payment won’t do you any good – but it needn’t be the difference between getting a deal or not. Credit scores weigh up lots of different pieces of information and if everything else on your report and application form is favourable it may not be an issue. It is best to make sure that you don’t miss any further payments from then on.

It’s fair to say that most lenders focus on your most recent payment history. A solitary missed payment from over a year ago is probably unlikely to worry them very much.

Darren Beach is editorial content co-ordinator at Experian.

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