When you miss a repayment deadline, you could do damage to your credit score. This may make it harder for you to borrow in the future.
Simply put, your credit score is a measure of how reliable you are with money – particularly repaying it. The higher your credit score, the more creditworthy you are seen as, and vice versa.
Nearly every time you apply for a loan, credit card or a utility service, such as a mobile phone plan, your provider looks at your credit score. The lower your credit score, the harder it is to get your application approved.
A high credit score, on the other hand, will increase your chances of getting approved and you may also be offered a better interest rate.
If you miss a repayment by just a few days, it won’t get listed on your credit report.
A high credit score, on the other hand, can increase your chances of getting approved and you may also be offered a better interest rate.
An overdue repayment stays on your credit report for two years, after which it will go away.
But, if it's more than 14 days late, it's classified as an 'overdue repayment'. This means it's recorded on your credit report where it stays for 2 years.
If it’s worth more than $150 and more than 60 days late, it becomes a default, and stays on your credit report for 5 years.
Did you recently miss a repayment deadline? Pay it now if you can. If it's not more than 14 days late, your credit score won't be hurt.
In the future, make all repayments on time (setting calendar reminders for each repayment date will help you do this). This will do good for your credit score. Plus, you'll avoid late fees.
If you know that you may struggle to meet a repayment deadline for a MONEYME product, reach out to us straight away. We have options available and are here to work out a plan with you.
In Australia, we have comprehensive credit reporting. This means both good and poor credit behaviour get listed on your credit report, and good credit habits can help balance out any negative credit events.
So, even if you have overdue repayments or defaults listed on your credit report, you can make up for it by consistently paying on time in the future. Over time, your credit score will recover.