How Will Late Loan Repayments Impact Your Finances?

Keeping on top of your finances in everyday life is something which most of us prioritise over other essentials. People tend to stick to a budget or manage their money weekly to ensure that they are not overspending. Although, some people may have made wrong turns with their finances leading to them borrowing a loan.

When borrowing a loan, typically you will agree to repay small amounts every month until it is completely repaid. But what would happen if your payment was late or you missed a payment?

Before anything…

Before you start to worry, the first and the best thing which you should do when thinking your payment might be late is to contact your lender. This way you can let them know the situation so it is not a shock to them that your payment will not appear. For extra help, you could also visit the Money Advice Service.

Will late repayments impact my credit score?

Your credit score is a number which reflects your relationship with finances. It is impacted by different things. This includes your payment history, whether or not you’re on the electoral roll and multiple other aspects. So, any kind of late loan repayments will negatively impact your credit score. If you miss a payment, your score will drop quite significantly.

Does the number of my credit score matter?

If you have a bad credit score, the likelihood of you being accepted on credit agreements is low. Your credit score matters for more things than you may even think. They are used when buying or renting a home, mobile phone providers and even when you are applying for a job etc. Each individual provider will look at your credit score to give them an idea as to whether or not you are somebody who will repay on time. Therefore, it is an important aspect of your daily life.

What would happen to my daily finances?

If you find yourself in unexpected debt and are in need of a loan, you may struggle to find a lender willing to accept you. This is because typically, those with a low/bad credit score are perceived as a higher risk. Along with this, if you are not accepted for a certain credit agreement, you may spend even more money on an alternative.

How do I raise my credit score?

Raising your credit score is not something which happens overnight. It is something which is worth putting time and effort in to. Some of the most common steps people take when increasing their credit score are to enrol on the electoral roll, to repay bills on time and to correct any errors.

Thankfully, lenders like us here at BingoLoans offer loans to those with a bad credit score as we understand that not everybody has the perfect finances all of the time. Although, please remember that a loan should be your last option when in need of some extra help. When applying you should always consider whether or not you will be able to repay on time. This is an essential factor when it comes down to lending.