If, for whatever reason, you didn’t contribute towards paying back your doorstep loan one week, it could have a negative impact on your credit rating.
All loans and repayments are recorded in your credit file. Therefore missed repayments are reported to credit agencies as a missed repayment and could have a negative effect on your credit score. Missing repayments also puts you in arrears, which could mean you’re behind on your agreed payment schedule.
Communication is key to repayment difficulties. If you’re not going to be able to pay the amount you’re supposed to, ignoring it will only make the situation worse and you’ll still owe the money regardless.
The first thing you should do is talk to your lender; you might be surprised at how much they can help. They’ll often explain that if you are able to afford to pay a smaller amount you can avoid a missed payment going on your credit report, although it will be recorded that you’ve repaid a smaller amount.
If you’re behind on your repayments already, your lender will know and will be able to advise best on the next step.
If you’re worried about repayments, the best thing to do is speak to your lender. If you think you need extra help, StepChange offers free advice on debt management. Money Advice Service gives free, unbiased advice on how to manage your money more affectively, whilst the National Debt Line gives free, confidential debt advice.
For details on how it might affect you otherwise, our Bad Credit section has a piece on credit ratings and missing loan repayments, which will tell you about arrears in general and how non-payments can affect your credit score.
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What happens if i miss a payment on my doorstep loan