Missing a payment may impact your credit score as we may report this to the credit reference agencies.

Learn how late payments affect your credit score and what steps you can take to minimise the impact. Snap Finance explains the significance of timely payments and offers tips to manage your credit health effectively.

Understanding the Impact of Late Payments

Credit reference agencies like Experian, Equifax, and TransUnion (formerly Callcredit) place significant emphasis on your payment habits. Missing a payment can lead to Snap reporting the missed payment to these agencies, negatively affecting your credit score.

Late Payments: Missing a payment may impact your credit score as we report this to the credit reference agencies. Payments that are 30 days late or more will be reported and will likely negatively impact your credit score. The severity of the impact increases with the lateness of the payment (60 days, 90 days, etc.).

Frequency Of Late Payments: Repeatedly missing payments will have a substantial negative impact on your credit score. Regular late payments can signal to lenders that you are a higher credit risk.

Impact By Credit Score: In the UK, individuals with higher credit scores may experience a more significant drop in their scores following a missed payment compared to those with lower scores. This is because the missed payment represents a significant change in behavior for someone who previously demonstrated reliability in managing credit. 

Duration Of Impact: A missed payment can stay on your credit report in the UK for up to six years, affecting your ability to obtain credit during that time. However, its impact on your credit score can decrease over time, especially if you take positive steps such as making consistent, on-time payments subsequently. 

Other Factors: Your overall credit health in the UK is also influenced by other factors, including your credit utilisation ratio, the length of your credit history, the types of credit you have, and the number of credit applications you’ve made recently. Improving these aspects can help mitigate the impact of a missed payment.

How to manage the potential negative impact of a missed payment in the UK

Catch Up Quickly: Make the overdue payment as soon as possible to minimise the impact.

Communicate With Lenders: If you’re experiencing financial difficulties, contact your lender. Speak to Snap on 03300 104137. We may be able to offer solutions like payment plans that could help you avoid missing payments.

Regularly Check Your Credit Report: Regular monitoring can help you understand your credit score and detect any inaccuracies or fraudulent activities early.

Each credit reference agency in the UK may score you slightly differently, it's sensible to check your credit report with all three to get a comprehensive view of your credit standing.

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