Do Missed Car Payments Impact Credit in Flamborough?

Do Missed Car Payments Impact Credit in Flamborough?

Posted on August 13, 2021

While we should always avoid missing an auto loan payment, if it happens, how do missed car payments impact credit? What should you do to minimize the damage and prevent it happening again?

We asked our Flamborough auto loans team to explain what happened when you miss an auto loan payment and how to minimize its impact.

Missing an auto loan payment

You should always do whatever you can to avoid missing loan payments wherever possible. That said, life happens and stuff gets in the way so it’s only natural to forget something once in a while.

So, how do missed car payments impact credit in Flamborough?

Much will depend on the lender.

Some lenders will give you a call or email you to make you aware of the missed payment. Some will wait a few days and send a letter.

The vast majority of lenders will alert you to the missed payment and provide the opportunity to make that payment.

What happens after missing an auto loan payment?

What happens next is entirely up to you. We recommend paying immediately and remedying the situation that made you miss the payment in the first place.

That could be setting up an automatic payment so you never miss it again. Change the due dates on other payments so you always have money to make the payment.

Or set a reminder on your phone and/or computer to remind you to make payments.

Missed payments and your credit score

While lenders are always cautious about borrowers missing payments, most of them understand that life happens. If you pay immediately and show them you have taken action to prevent it happening again, you may get a pass.

If it’s your first missed payment, you’re likely to get a pass. Pay the amount quickly, within a few days and the lender may not report the missed payment.

If you don’t make the payment quickly and the amount is outstanding for 28 days, the lender will very likely report the missed payment.

That missed payment will be entered onto your credit report and stay there for up to 6 years. Your credit score will also take a hit.

How much of a hit depends on your current score but could be up to 150 points.

Preventing missed auto loan payments

We mentioned how you can prevent missed auto loan payments above.

The most effective way is to set up an automatic payment for the loan payments and making sure there are sufficient funds to pay.

If that means cutting back on spending or changing payment dates on other outgoings, do it. One missed payment isn’t the end of the world but miss more than one and things can become a lot more serious!

Contact Unique Chrysler for help, advice and competitive Flamborough car finance and leasing.

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