Arrears

If you miss payments on a credit facility, your account is ‘in arrears’ by the sum you haven’t paid. This can be expressed by amount of the missing payments, or by the number of months’ payment you have missed, such as ‘£50 in arrears’ or ‘3 months in arrears’.

Depending on the severity of the arrears they can have a varying impact on your credit rating and your subsequent ability to obtain credit. The majority of consumers have the odd late payment no more than one month in arrears. If you only have two or three such payments in arrears they will have very little impact on your credit rating. However, payments which are two months in arrears will have a noticeable impact on your rating and any payments later than this will regarded as serious arrears. Payments in serious arrears can often result in default and possibly further court action.

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