Your home may be repossessed if you do not keep up repayments on your mortgage.
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Missed payments
Missed payments
If you have missed a payment on a loan or credit card, the first thing is not to panic. With interests rate edging up and personal debt at record levels missed payments have become a more common feature of a person's credit file.Most people who have missed a payment, do so by accident, merely forgetting or overlooking when the payment was due is a common reason. If you have a track record of paying your debts on time and the missed payment is a one off; it will not do your credit file much harm; most lenders will be able to see that it is a one off.
However a history of missing payments will have an adverse effect on your ability to borrow money at preferential terms. A history of missed payments reduces your credit worthiness, as result you will be seen as a higher risk by lenders.
One way to avoid missed payments is to use the Direct Debit system to pay creditors. Direct debit makes it the creditor's responsibility to take the correct payment from you on the correct date. This should avoid missed payments altogether. You are also protected by the Direct Debit Guarantee. This ensures that:
- If there is a change in the amount to be paid or the payment date, the person receiving the payment (the originator) must notify the customer in advance.
- If the originator or the bank/building society makes an error, the customer is guaranteed a full and immediate refund of the amount paid.
- Customers can cancel a direct debit at any time by writing to their bank or building society.
This is a much safer method of paying debts than by using a Standing Order which puts all the responsibility on you to ensure the payment amount is correct and that it is received by the creditor before the due date. If you know you haven't got the funds to pay - don't panic. Immediately contact the institution involved, they may be able to reschedule your payments so that you pay a lower amount. It is always better to speak to the company rather than missing the payment altogether. As a missed payment will stay on your credit file for 6 years
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