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What happens if you miss a credit card payment?

Credit cards can be very handy in emergencies, for improving your credit score or for when you want to spread the cost of spending. But if you miss a credit card payment, it can cost you. Not only will a late fee and interest be applied, but your credit score can be affected.

4 min read
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What to do if you’ve missed a payment

If you have missed a credit card payment, there are several things you can do to limit the damage:

  1. Contact your lender to explain the situation and see if you can get extra time to make the payment
  2. Make the payment as soon as you can to minimise additional charges or further action
  3. Set yourself reminders in advance (e.g. on your phone), to make sure you don’t miss any more payments
  4. Even better, set up a monthly direct debit or standing order for at least the minimum payment. (Make sure you have enough money in your bank account to pay for this, so you don’t incur fees)

If you can’t pay immediately

If you can’t afford to pay straight away, don’t panic. Get in touch with your lender as soon as possible. You might be able to come to a mutual . 

For example, you could negotiate a more affordable repayment plan. Some lenders will accept small token payments, or let you take a ‘payment holiday’ until you get back on your feet. This depends on the lender and your circumstances.

But bear in mind that they can still apply a default to your credit file if you consistently miss payments. This can usually happen if you miss three to six payments - or make reduced payments.

If you are in financial difficulty, consider getting free debt advice from Citizen’s Advice or StepChange. Debt charities can liaise with creditors on your behalf if you don’t feel comfortable doing so.

How bad is missing one credit card payment?

Ideally, you want to maintain your credit card payments in full, on time, every time. That way, you can build up a good credit history and avoid interest and late fees.

If you miss a payment, lenders can add interest and a late fee of up to £12. They can also revoke any rewards on your credit card.

A marker will be added to your credit file, which could potentially deter lenders from accepting future credit applications. Your past financial behaviour could give them the impression that you can’t afford additional credit repayments.

Having said that, every lender uses their own criteria, so your future credit application success rate will vary from lender to  lender.

You can also rebuild your credit history over time, by maintaining your payments going forward. This will help to reduce the impact of the missed payment on your credit score in the long-run.

How will one late payment affect my score?

If you make a late credit card payment, you could face the same penalties imposed by lenders as when you miss a payment entirely - such as interest and late fees.

A late payment marker will show on your credit report, which can negatively affect your credit score. Making a late payment may also indicate to lenders that you’re struggling financially. So, this could put them off lending further credit to you. If they do accept your credit application, you may be offered higher interest rates.

But one late payment doesn’t mean you will always be rejected for credit. Each lender uses its own criteria, and some are more flexible than others.

Also, if you maintain your payments over time, you should see your credit score gradually increase. By building up a good credit history, the impact of late payments will lessen over time, and your chances of getting accepted with better interest rates should improve.

You can check your credit score for free with any of the top credit reference agencies in the UK. This will help you to identify what is affecting your score. You can do this as many times as you like, as it only counts as soft searching.

Do late payments stay on my credit report?

If you were to miss three to six payments and receive a default - this will stay on your credit file for six years. This would reduce your credit score more than a single missed or late payment.  Further missed payments could lead to a County Court Judgement which would seriously reduce your ability to get credit and also stay on your report for six years.

The good news is, the effect that one late payment has on your credit score should be minimal and will gradually reduce if you maintain your bill payments going forward.

Also, lenders tend to focus more on your recent credit history, so you should have more chance of getting accepted if you make sure the rest of your credit file is in good shape.