A credit card expert has explained what the real impact of missing and making late payments is on your credit score.

The cost of living crisis has meant that many Brits have turned to credit cards and loans to financially support themselves. 

Credit cards can present a reasonable solution when handled appropriately but there are reports that highlight many people struggle to meet repayment schedules.

As a result of unexpected bills or emergencies, sometimes payments get missed or sent late.

With this in mind, the team at Vanquis has explained the impact of these late or missed payments on credit scores.

The experts have also offered tips that you could consider that could help you tackle the issue.

However, they also issued a disclaimer that explained that its commentary is for informational purposes only and should not be considered financial advice.

Do late or missed payments affect your credit score?

The impact of a late payment on a credit score will vary from person to person and is dependent on a few different factors, according to Vanquis.

The experts explained that your payment history can have an impact which includes how many late payments you've made on any credit cards, loans or mortgages.

How much of an impact may depend on a lender's individual rules around lending, what information they pass on to the Credit Reference Agencies (CRAs), and how each individual CRA uses that information.

Vanquis continued: "If you consistently make late payments or can't pay for a significant period of time (for example, longer than 30 days), this can mean lenders perceive that you aren't able to manage your credit agreements and the payments.

"If you have late payments on more than one agreement, this can also affect your score negatively".

Can missed payments affect your credit score?

Vanquis has commented to say that completely missing a payment can harm your credit score since it reflects how reliable you are with managing credit and making repayments.

As a result of poor account management, you could be excluded from benefits like credit limit increases and interest rate reductions.

How long does a late or missed payment stay on your credit report?

Late payments are usually kept on your credit report for six years, Vanquis said.

The experts added: "The impact of a late payment should reduce over time, so any recent late or missed payments are likely to have more of an effect than any older missed payments.

"This is because most lenders often refer to your recent credit history when deciding whether to lend to you".

The experts noted that if you can maintain a good payment record and make all future payments on time, the impact of one late or missed payment could be reduced.

They added: "If you're unsure what is impacting your credit score, it might be a good idea to obtain an up-to-date record from a credit reference agency.

"If there are any mistakes on your credit report, or you have a good reason for a missed payment (such as long-term illness or unemployment), you can ask the credit reference agency to correct your report|".

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How to tackle late or missed credit card payments

1. Only apply for credit you need and can afford

It may be worth assessing your finances in detail before applying for a credit card to lower the risk of not being able to pay later down the line.

2.   Set aside some money for unexpected payments or emergencies

You never know what might be around the corner. So, if affordable, consider setting money aside to reduce the risk of missing payments for any credit agreements.

3.   Set up regular, automatic payments

Look into organising standing orders or Direct Debits via your online banking portal or app, to ensure payments are made even if you forget.

4.   Keep on top of your payment due dates

You might want to make use of an online or phone calendar to track your payments and set up alerts when they are due.

5.  Arrange payments to suit your schedule

If possible, work out whether it’s best to either stagger payments to spread them out, make sure everything comes out close together, or in line with the date you receive your income.

6.    Speak to your credit card provider

If you’re facing difficulties, your bank or provider might be able to help you to decide on the best way to tackle a missed payment, set up regular payments, or assist you with your finances in general.

There is also the option of getting in touch with a debt counselling charity.