Did you miss a payment and now have to tell your credit provider? While it can seem daunting, the steps towards getting your missed payment sorted are straightforward.
What to do when you miss a payment.
The simple answer is to ring your credit provider or to notify them through email. Let them know you missed your payment, that it was a mistake and you won't do it again. Usually, they can fix another repayment date, although you may end up paying late fees or even getting points deducted from your credit score.
Again, you might be able to talk your provider out of this if it's just one or two missed repayments. The key is to set a new date and repayment amount per month with your credit provider to show them you're serious about meeting repayments in future.
Is it bad if my missed repayment is a default?
Defaults are a whole different issue. When you default, it means you've missed several payments in a row. Creditors will calculate defaults in advance if it looks like you're unable to meet repayments, avoiding them or stopping entirely. That also includes any interest or principal amounts missed on the payment.
Defaults are way worse on your credit score and are harder to remove. A default can end up lowering your credit score and can take up to five years to remove. The key to avoiding them is not to miss any repayments. But if you have already, the next step is making sure those missed payments don't turn into a string of unpaid debt that ends up with you getting contacted by a debt collector.
For a single missed payment, it's rare to get shifted over to a debt collector. But when you default or your provider cannot contact you, you may get shifted over to a debt collection agency. There are too many to list here, but some of the main ones you might deal with are Baycorp or EC Credit Control.
How do I know I'm not being scammed?
It's fair enough to be wary of anyone who contacts you asking for money — some may even disguise themselves as a legitimate business. We've got a whole other blog on staying safe online if you want some tips on the subject.
But as far as your debt collector is concerned, if you've any queries, ask your provider which agencies they deal with. They're the ones who call in a third party debt collection agency in case your missed payments haven't been honoured. Sometimes you can even shift your missed payments back to your provider — but if not, make sure you're paying to the right group of people.
It always pays to double-check the email itself, too, for spelling and grammatical errors or anything else a little unusual.
I only missed one repayment.
In that case, all you have to do is make up for that missed repayment.
How can I avoid missing a repayment again?
You can set up regular repayments with your bank account to be sure you make all future repayments on time. But we'd also suggest that you set reminders to check those repayments went through if you do. An automatic payment can't tell if you have nothing in your account and will still process the refund.
You may also want to get some further legal advice if you're struggling to make repayments with the required interest rate. One tip we can give you is to check out debt consolidation, which is an option that groups all your loans and turns them into one lump sum repayment.
It's easy to talk to a credit provider about sorting your missed repayment — just ring or email them to tell them what's happened. Sometimes they can even reverse the damage if it hasn't been entered into your credit history yet. But if they can't, and you do find your credit score drop and fees added, you can still turn things around by sorting out a new history of positive repayments with your provider.