Missed and late payments on your credit file

A late payment is recorded on your credit file if a bill is paid after the due date has passed¹. Lenders then see a small number next to each late payment telling them how many months late it was¹. Missed payments, late payments and defaults stay on your credit history for six years¹, and missed payments on your credit file can make it harder to get credit in future and to remortgage².

The marker is not a punishment that a lender imposes on its own authority: it is a record of what actually happened on the account, reported to the credit reference agencies (Experian, Equifax and TransUnion) that hold your file. That matters for two reasons. First, a marker that records the truth cannot simply be deleted because you would like it gone. Second, a marker that is wrong, because the payment was not late or the wrong amount was requested, can be disputed and corrected¹.

What a late payment marker is and when it appears

A late payment is one which missed the deadline but was satisfied within a month¹. A missed payment is one that was not made at all. Both are reported by the lender to the credit reference agencies, and both appear in the payment history section of your credit report alongside everything else a lender can see: your name, address and date of birth, whether you are on the electoral roll, how much you owe, late and missed payments, county court judgments, repossession, bankruptcy or an IVA³.

Not every account you hold feeds this system. Your credit report does not include the balance of your current account, your salary, savings accounts, student loans, your criminal record, medical history, parking or driving fines, or council tax arrears³. What it does include is credit agreements: mortgages, overdrafts, credit cards, loans, mobile phone contracts, utility accounts and, increasingly, buy now pay later arrangements. Anyone 18 or older who has ever taken out a credit agreement, whether a mortgage, overdraft or mobile phone contract, will have a credit report³.

The timing of when a marker appears depends on the lender's reporting cycle, but the trigger is simple: the payment was due, the due date passed, and the money had not arrived. Different types of credit add their own consequences on top of the marker. Most payday lenders will charge a late or missed payment fee if you do not pay by the agreed time and date⁴. Buy now pay later providers may charge a penalty fee if your payments are late or missed, and may also pass information about the missed payment to the credit reference agencies, which will affect your credit score⁵. Late payments to Laybuy and Clearpay are penalised with extra fees⁶. On a mortgage, you may be charged a penalty fee for a late payment, and missed mortgage payments are recorded on your credit file⁷.

Council tax works differently because arrears are not held on your credit file³, but missing a payment still has consequences of its own. In Scotland, if you miss a Council Tax payment after 31 December you will also get a final notice and must pay the full remaining balance for the year⁹.

How the monthly payment history shows late payments

Your credit report does not just say "this person was late". It shows a month-by-month grid for each account, with a status code for every month of the agreement's life. Lenders assessing you will see a small number next to each late payment to advise them how many months late the payment was¹. A payment one month late shows a 1, two months late a 2, and so on.

The codes follow a pattern that lenders read at a glance:

• 0 means the payment was made on time that month.
• 1 means the payment was one month late.
• 2 means the payment was two months late, and higher numbers continue the pattern.
• D means the account has defaulted, the point at which the lender has concluded the agreement is broken.

The distinction between these codes is what turns a single slip into a story a lender can read. A run of 0s with a single 1 in the middle looks like a one-off. A sequence climbing 1, 2, 3 looks like a borrower in growing difficulty, and that is the pattern that leads toward a default. The dedicated guide to account status codes explains the full set of codes and what each one tells a lender.

One or two missed payments versus three or more

The number of missed payments matters more than any single one. If you miss one or two payments, you will usually get reminders; if you catch up, no further action should be taken, and the missed payments may not be recorded on your credit file at all, though interest and charges, including late payment charges, will be added². Missed mortgage payments are recorded on your credit file⁷, and under the terms of most mortgages, the lender can usually call in the whole debt after two or three missed payments¹⁰.

From two missed payments, formal obligations kick in for the lender. Your creditor must send you an arrears notice if you have missed two monthly payments and owe at least that amount on your agreement¹¹. If the payment is made weekly, the arrears notice must be sent if you have missed four payments and owe at least that amount¹¹. Since October 2008, the arrears notice must also tell you where you can get help and advice¹². The same rule is stated as applying once you have missed two or more payments¹³.

From three or four missed payments, the position hardens. The missed payments will be recorded on your credit file, and for credit card or buy now pay later debts the creditor will soon think about sending a default notice and considering other recovery steps². Continuous non-payment on car finance can result in formal notices of arrears and, after three or four missed payments in a row, a default notice¹⁴. A default is generally recorded once you have missed three or more payments¹⁵, and credit reference agencies' guidance is that a default usually happens after you have missed between three and six months' payments¹⁶. Credit card companies may send a default notice if you miss three to six payments¹⁷.

A default notice gives you at least two weeks to make up the missed payments¹⁹. It is a formal warning under the Consumer Credit Act, and it is usually sent after six months of missed or reduced payments¹⁹. The guide to defaults and default notices covers what a default means for your file and what happens next.

How a late payment marker affects your credit score and borrowing

A late payment marker can lower your credit score⁵. Making a late payment negatively affects your score regardless of which agency holds the file, in the same way as not being on the electoral roll²⁰. The scale of the damage depends on how recent the marker is and how many there are. A late payment might be ignored by lenders and have no or little impact on your credit score if it took place two to three years ago¹.

For borrowing, the practical effects are clearest with mortgages. If you have just one or two late payments to unsecured debts over the past six years, your mortgage application may be unaffected. Any more than that, and you may be expected to put down a larger mortgage deposit or pay a higher mortgage interest rate¹. A missed mortgage repayment leaves a mark on your credit report that impacts your credit score, and that mark will remain for six years⁸.

Fees can compound the problem while it is happening. An FCA review found that in most firms sampled, customers could be charged multiple fees or charges stemming from a late or missed payment within a single month or payment cycle²¹. So a single missed payment can trigger a late fee, an unpaid direct debit fee and interest charges together, making it harder to catch up the following month.

The effect weakens with time even though the marker stays. Missed payments go on your credit file and can make it harder to get credit in future and to remortgage², but a late payment might be ignored by lenders and have no or little impact on your credit score if it took place two to three years ago¹. Lenders weight recent history most heavily, so a marker from four years ago with a clean record since counts for far less than one from last month. The guides on what affects your credit score and how to improve it set out the full picture.

Late payment markers stay on your file for six years

Late payments stay on your credit history for six years, as do missed payments and defaults¹. The same six-year period is stated across the main guidance: missed payments stay on your report for up to six years³, all missed, late or partial payments are recorded on your credit file for at least six years⁷, and information such as missed payments, default notices and court judgments will generally stay on your credit file for six years¹⁵. Arrears information stays on your credit report for six years²², and a missed mortgage repayment mark will remain for six years⁸.

Six years is counted from the marker itself, not from when you pay the arrears. Paying what you owe stops the account sliding further behind, and the payment history will show that you caught up, but the record of the missed months remains until it ages off. This is the same rule that applies to other entries: a CCJ will still stay on your credit report until the six years is up, but your record will show that you have paid the debt²³.

The six-year clock also applies to the more serious entries that missed payments can lead to. Bankruptcy appears on your credit file for six years, and the Minimal Assets Process in Scotland is logged on your credit file for six years²⁴. The guide to how long information stays on your credit file covers every entry type together.

Joint accounts: when someone else's missed payment shows on your file

On a joint debt, missed payments are marked on both credit files, regardless of who actually missed the payment²⁵. This is the single most important rule about joint borrowing: the credit file records the account, not the individuals' behaviour on it. If a payment is missed on a joint loan, it is recorded on your credit file as well as your ex-partner's, even if your ex-partner agreed to repay the debt²⁶.

The reverse offers some protection. If your ex-partner falls behind on repayments to credit debts that only they are liable for, those missed payments will be recorded on their credit file only, not yours²⁶. Debts in a sole name follow the sole name.

The connection between joint borrowers is recorded as a financial association, and it can outlast the relationship. Even after an account is closed or a divorce is final, the association may remain on your file until you ask for it to be removed, and lenders may still see it when assessing you. The guides to financial associations and how to remove one and whether a partner's bad credit affects yours explain how to break the link, and debt solutions and your credit file covers what happens to joint debts in a separation.

How to check your credit report for free

You can request a statutory copy of your credit report from any of the credit reference agencies free of charge³, a right that comes from the Data Protection Act 2018²². Your report should be sent to you within seven working days unless the agency needs proof of your identity or address²⁷. There may be a fee for other routes to a copy, and each agency has different rules and costs²⁷, but the statutory copy itself is free.

Beyond the statutory copy, free trials give fuller access. Equifax offers a free 30-day trial of its full credit monitoring service, and signing up for a free trial with CheckMyFile gives access to all the information held on you by TransUnion, Experian and Equifax for 30 days²⁰. Checking your own report does not lower your score; what can lower it is multiple hard searches by lenders, particularly within a short period²⁰.

Because the three agencies hold separate files, a late payment can appear on one and not the others, depending on which agencies the lender reports to. Klarna, for example, reports to Experian and TransUnion, so existing, late and unpaid balances are visible on those files³. Checking all three is the only way to see the full picture, and the guide to how to check your credit report for free lists the current options, with why your score differs between agencies explaining the gaps.

Removal is possible only when a marker is wrong, or at the lender's discretion

Getting a missed payment removed is possible, but it depends entirely on the discretion of the lender or company you hold the account with, or on you proving the marker should not be there in the first place¹. There is no general right to have an accurate marker deleted, and no fee you can pay that changes that. The FCA has guidance that misleading claims about removing negative but accurate credit file entries are likely to breach its Principles, which is a warning about credit repair firms that promise otherwise.

The two routes that exist are:

• The marker is wrong. You can dispute the late payment as inaccurate if you can prove it was not late, or that the wrong amount was requested¹. This covers payments taken late by standing order, direct debits the lender failed to collect, and amounts disputed at the time.
• The lender agrees to remove it. A lender may remove a marker as a goodwill gesture, typically where there was an error on its side or an agreed arrangement in place, but it is under no obligation to.

What never works is paying a company to "clean" your file. Accurate entries stay until they age off after six years¹, and the guide to credit repair companies and fixing your file yourself sets out what these firms can and cannot lawfully do.

Disputing an incorrect marker

If you believe a late payment marker is wrong, the dispute process runs in a set order. First check all three reports, because the marker may appear on one agency's file and not another's. Then collect your evidence: proof that the payment was not late, or that the wrong amount was requested¹. Then complain to the lender that reported the payment, since the agency will normally only change what the lender confirms.

If the lender does not resolve the complaint, the Financial Ombudsman Service is the next step. Its guidance is to complain to the company involved first; if it does not send a final response within eight weeks, or you are unhappy with the response, you can then complain to the Ombudsman²⁹. The same eight-week deadline applies to complaints about credit union accounts, which credit unions have eight weeks to investigate before giving a final response³⁰.

The guide to how to correct wrong information on your credit report covers the evidence lenders accept, and how long a dispute takes covers the deadlines agencies work to.

Adding a note to your file and where to get help

If a marker is accurate but there was a good reason for it, such as illness or a sudden loss of income, you can ask the agency to add a note to your file explaining the circumstances. This does not change your score, but lenders read it, and it can make the difference between an automatic decline and a human decision. The guide to the Notice of Correction explains what to write and where it appears.

If you cannot pay, the most useful thing to know is what the process looks like from the lender's side. The lender will contact you after you miss one or two payments, and at this point they should discuss ways for you to catch up and pay the arrears³¹. On car finance, the lender may issue a default notice if you keep missing payments, then take further action to collect the debt and recover the car, possibly using a debt collection agency or applying for a county court judgment³¹. The arrears notice the lender must send after two missed payments has to tell you where you can get help and advice¹².

Free, impartial help is available:

• StepChange provides free debt counselling, online and by phone²⁴.
• National Debtline and Business Debtline publish guides covering credit reference agencies in England and Wales and in Scotland¹⁶.
• Advice NI covers credit reports and credit reference agencies for Northern Ireland²⁷.
• MoneyHelper is the government-backed service for everyday money questions, including credit union accounts and complaints³⁰.

The debt section of this site brings together the help options and your rights, and what to do if you are refused credit covers the steps to take after a declined application.