Can I get Car Finance with Late Payments?

When you take out any credit agreement, including car finance, you’ll make repayments on an agreed date each month. Your lender takes the money via direct debit from your bank account.

Suppose the payment does not go through for whatever reason, but usually because of insufficient funds in your account.

If your payment fails, acting quickly and paying within 30 days of the original due date will likely avoid a late payment mark on your credit.

Typically, the creditor’s reporting date is more than 30 days after your due payment date giving you time to pay and avoid a credit penalty. Some lenders don’t report for 60 days but don’t chance your luck.

The best advice if you miss the payment date is don’t delay but to pay immediately. However, be prepared to receive late payment charges from your lender.

Late payments are something that can quickly happen and damage your credit. You may find yourself asking can I get car finance with bad credit? You likely can, but you’ll pay a higher rate of interest.

Can I get car finance with late payments on my credit report?

Sounds easy! Avoid late payments on your credit accounts; you’ll likely never get a dodgy credit history.

What about late payments? Will they affect your car finance eligibility?

Even a single late payment is likely to affect your credit slightly, and several overdue instalments on a credit agreement could drop you into a bad credit band. You’ll likely still get finance, but buying a car with a poor credit score will cost you higher interest charges.

This article concerns late payments on a credit account and how it could harm your credit history.

However, it would help to understand the difference between late and missed payments when they appear on a credit file.

• Late payments  – are when you don’t pay by the due date. A Late payment won’t affect your credit file if paid within 30 days.
• Missed payments – refer to payments not made at all.

A late payment of 30 days or more can cause a significant drop in your credit score, even if you have a good credit history.

If you receive a late payment penalty, it stays on your file for six years. Late payments can impact your credit score and harm your chances of getting car finance.

The impact of a late payment will reduce over time so that any recent late payments will have more of an effect than any older payments. Lenders will refer to your more recent credit history when looking at an application for car finance.

If you can maintain a good payment record and make all future payments on time, the impact of one late payment will reduce.

Don’t allow a late payment penalty to become a missed payment! Suppose you miss three payments. Your lender could issue you with a default. Your chances of getting a worthwhile car finance deal with a defaulted account sitting on your credit file are unlikely.

Can late payments affect getting car finance?

Subject to your terms and conditions, you’ll likely receive extra charges for late payments if your payments are late (not paid by the due date).

However, overdue payments of more than 30 days can appear on your credit history. Late payments can hammer your credit score and chances of getting car finance.