Is there a difference between a late payment and a default

[JonathanC]

I just logged into one of my credit card accounts and was really upset to see a late payment charge of £12 for a payment that should have been made by December 16th.

This is the first time in 7 years of having credit cards that this has ever happened to me! The reason it happened is because the e-statement reminder went into my junk mail folder and I therefore didn't notice it :-(

Does anyone know whether there's a difference between a 'late payment' and an actual default - and how those differences would translate into affecting my credit score.

[JonathanC]

Just found this link which explains that my missed payment wouldn't be considered a default.

However, I was wondering whether a mere missed payment would be reported to the credit reference agencies, and if so, whether it would have an adverse affect on my credit rating.

I just made a Faster Payment for the full balance so have missed the payment due date by 9 days.

[LeftMuffin]

Missed payments do show up on your credit score so will go against you. To what extent I don't know.

[mcflurry]

IMHO a single late payment shouldn't have a huge impact, as long as the rest of your stuff is in good order, and you pay any future bills before the due dates

[KelWedge]

Yes it will go on your credit file, but the odd one late payment is not going to do much damage to a good credit score and if you then have a couple of OK no problem months after that, No Problem.

[Stevenj214]

Give the card company a call and explain the situation. They may remove it, especially as a first 'offence'.

[oola]

In the future to avoid this, why not set up a direct debt for cc payments? You can pay the minimum or full balance without worrying about the bill or missing payments.

[jeff m2]

We recently had a late payment fee of $25 on a store card run by HSBC.(I opened it to get 15% discount)
We didn't receive the first bill, the second arrived with the late fee. I called up and offered two options to customer service, I'll pay the bal plus the 25, but I will close the card. Or...cancel the 25 and I will continue to shop at your wonderful store as I think you guys are great.

Can you pay right now by electronic cheque ?
Yes

They cancelled the 25 and gave me a $25 credit to keep me as a customer.
The girl said one late payment would not have been reported.

Credit score has a big impact on car insurance in the States, so very important to protect it.

[PaulMoor]

They won't take it off, but one missed payment followed by payment of the balance in full will look better on your credit report than making the minimum payment.

7 years of good payment followed by one missed payment, however, will make no overall diffrence.

Also, for completness, a default is the point at which they consider you will not or cannot pay the debt. This can, in theory, be as soon as the first payment is missed, but in the case of credit cards and bank loans, where it is all automated, that is normaly reported after 6 missed payments.

Edited by PaulMoor on Tuesday 27th December 10:35

[ringram]

oola said:

In the future to avoid this, why not set up a direct debt for cc payments? You can pay the minimum or full balance without worrying about the bill or missing payments.

+1 this is mandatory IMO

[JonathanC]

Thanks for all your advice guys.

I wrote an email to them yesterday explaining to them the adverse circumstances. Based on my historical payment history, they were happy to refund the £12 fee and they assured me that my credit rating won't be affected.

Very happy now!