Is missed payment likely to hurt my chances of getting a mortgage?

Dear James,

I was just wondering, if I have got a missed payment on one of my credit cards, does it jeopardise the chances of me getting a mortgage? I would like to take out a mortgage in a year’s time as that is when I would like to buy my house. Will a missed payment still have an impact on my report by then.

Priya, London

Dear Priya,

A missed payment is certainly not going to help you get a competitive mortgage. Lenders check your credit report to see whether you’re likely to keep up payments on any credit they give you. If they see late or missed payments on credit agreements with other lenders they may worry that you will miss payments to them too. Late payments will certainly hurt your credit score, meaning that any credit you do manage to get might cost you more money. However, credit scores weigh up lots of different pieces of information and if everything else on your report and application form is favourable you might be ok. You really need to make sure that you don’t miss any further payments, so set up direct debits where you can. It’s fair to say that most lenders focus on your most recent payment history. So next year when you give a mortgage lender permission to check your credit report, a solitary missed payment from over a year ago is probably unlikely likely to worry them very much. You might consider checking out your Experian Credit Score to get an idea of how lenders are likely to rate your credit report. Good luck. (November 2011)

James
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