How Long Does A Missed Payment Stay On A Credit Report?

Prices are increasing faster than income. This means that many people are at risk of falling behind on payments. 2.3 million people missed at least a payment on their credit cards, rent and mortgage. Mortgage Finance Gazette states, “24% of adults or around 12m people in the UK missed a payment up to April 2024. Out of this, the maximum number of people missed one due to the cost-of-living crisis.

However, missing a bill payment can cost you significantly. You may struggle to achieve your goals. The blog discusses missed payments and their impact on credit scores.

Let’s first crack the biggest confusion- Late payments vs. Missed payments. Most individuals believe the terms are the same. However, it is not.

What is the difference between late payments and missed payments?

Missed payments and late payments are two different terms. A late payment is one that’s made after the due date expires. Any additional day one takes to pay the dues after deadlines lead to a penalty. Alternatively, skipping the due payment days in between is a missed payment. This is mentioned in your credit score. The higher the missed payments, the lesser the credit score. Here is the basic difference:

Does a 7-day late payment affect the credit score?

Paying the dues in less than 30 days does not affect your credit score much. Lenders and credit card providers would not report it to credit agencies until then. A single missed payment on your credits can cost you 0-100 pounds.

For example, missing a mortgage instalment means paying £100 extra on the next payment.  Some providers may charge £100/missed payment on mortgages. Moreover, your credit score declines by 52.58 points due to missed mortgage payments.

Alternatively, most individuals ask- “What if I miss a credit card payment by 1 day?” 

According to Experian, “ a payment that’s delayed by a day would not appear on your credit report. However, you must pay late fee, penalty and missed payment costs”.

Check out the possibilities to clear the dues quickly. Identify the amount you can arrange from your savings. Make your best attempt to avoid adding a missed payment fee. If you need slight cash flexibility, check affordable finance solutions.

You may get a short-term loan from a direct lender for repaying the credit card dues.  It is the same-day and easy-to-qualify solution for quick money.  It is easy to manage and repay comfortably within the lowest of your incomes or finances. However, tap it only if you don’t have any other way to pay the bill.

How long does a missed payment stay on a credit report?

Missed payments, collections and CCJs stay on your credit report for 6 years. It stays even if you repay the dues after that. However, the credit report reveals the paid status.  After 6 years, your credit score may start rising. It is if you settle the debts and reveal positive financial behaviour.

“If a late payment is on your report, it will stay there for six years. However, its impact on the score will reduce as the record ages” (Experian).

Thus, missed payment status does not stop you from getting loans or credit cards.  Some lenders consider profiles with debts and help. However, you may get one at competitive rates.

Avoid applying for new loans just after reporting the missed payments. It is not advisable to seek credit cards or other financial equipment for at least 3 months of reporting the missed payments.

What could be the accepted reasons behind a missed payment?

An acceptable response to missed payments is genuine and communicates requirements effectively. It could be an unexpected financial hardship like- medical issues, unemployment, business loss or natural disasters.

As credit agencies like Experian put it, “If there is a good reason behind paying late, explain it. You can do it by adding a notice of correction to your credit report. It could be of about 200 words.” 

A notice of correction adds genuineness to your reasons. It helps you get urgent loans for survival. Lenders check it to know the reason behind the late or missed payments. Stating the facts would help.  The notice of correction does not improve your credit score. However, it increases your chances of getting a new loan or a credit card.

How to remove missed payments from your credit report?

Yes, you can remove a missed payment from your credit report.  It is possible if it is a creditor’s or the lender’s mistake. Here are other reasons you can claim missed payments removed from your credit report:

Usually, it may take up to 30 days for an investigation. If your dispute and supported proofs turn out legal, your credit improves. If you want, you can report it to the credit bureaus as well. The experts will help you remove unnecessary or inaccurate missed payments.

Can you delete late payments from your credit report?

No, you cannot delete accurate late payments from your credit report. However, if your credit report reveals a bill as unpaid, report it. It may take 30 days of investigation to remove it. Moreover, the authorities only remove one if you have paid or share inaccurate entries.

How do you pay your bills on time?

Understanding your pending bills is the very first step towards timely payments. Check your credit report at least twice a month. It helps you know your dues and plan accordingly. Here are other ways to pay your bills timely:

1) Prioritise the small payments first

After knowing your dues, determine the smallest bills first. It is easier to pay than costly ones. Prepare a list of these with late fees and penalties. It will help you know the amount you need to pay on small debts. Budget for a payment at once.

2) Set up direct debits

Your small bills may range from payday to credit cards. Thus, remembering every payment date is challenging. Set direct debits for each payment. Yes, you need time for that. However, it eliminates the hassle. The company deducts the amount from your direct debit account immediately.

Alternatively, if your total short-term dues exceed 8-10, consolidate. It is the best way to repay the dues.  You pay a single payment to a creditor.

3) Pay costly bills one by one

Next, move on to rather big lump sum bills. It could amount to over 5000. It could be rent, subscriptions, or credit card payments. Calculate late payment and interest costs. Check whether you can negotiate the bill. Some providers may agree to help. Alternatively, seek debt advice from platforms like MoneySavingExpert.com. It will help you get professional help regarding most of your household bills.  It is one of the trusted platforms for financial assistance. 

Bottom line

A missed payment stays for over 6 years on your credit report. It is regardless of whether you clear it quickly. However, the impact lessens as the financial situation and credit improves. If confused, dispute the missed payment to creditors and credit bureaus. It will help you get the required help and clarity. Alternatively, set direct debits and reduce unnecessary borrowings. It promotes healthy financial management.