How Paying Very Late Could Affect Your Credit Score

Failing to pay your Very account on time can have significant consequences for your credit score. Very reports your payment history to major credit reference agencies, impacting your financial standing.

1. Initial Missed Payment: The process begins when you miss the payment due date on your Very credit account. While a single day late may not be immediately reported, it starts the clock on a potential default.
2. Official Late Mark: If the payment remains outstanding, usually after 30 days, Very will formally record it as a late payment. This creates the first official negative mark on your account history with the lender.
3. Reporting to Credit Agencies: As a creditor, Very shares your payment history with the UK's main credit reference agencies (CRAs), such as Experian, Equifax, and TransUnion. The late payment is now part of your wider credit file.
4. Credit Score Reduction: When the CRAs update your file with this new information, your credit score will likely drop. A late payment is a significant negative factor in credit scoring models.
5. Long-Term Impact: This negative marker can remain on your credit report for up to six years, potentially making it more difficult and expensive to secure future credit like mortgages, loans, or credit cards.

How Much Will a Late Payment Affect Your Credit Score?

The exact number of points your credit score will drop after a late payment depends on several key factors. Here is what to consider:

• How late the payment is. Lenders report lateness in 30-day increments, such as 30, 60, or 90 days late. A payment that is 90 days late will have a much greater negative impact than one that is 30 days late.
• Your current credit score. A single late payment can cause a larger point drop for someone with a high credit score. This is because a previously perfect payment history has more to lose from any negative mark.
• Frequency of late payments. A one-off late payment is less damaging than a history of them. Lenders view multiple late payments as a sign of higher risk, which will significantly lower your score over time.

How You Can Avoid Late Pay Affecting Your Credit Score

Automate Your Payments

Setting up automatic payments is one of the most effective strategies. Arrange for your bank or creditor to automatically withdraw at least the minimum payment on the due date. This eliminates the risk of forgetfulness and ensures your payment history remains consistently positive.

Communicate With Your Creditor

If you know you might miss a payment, contact your lender beforehand. Many are willing to work with you, potentially offering a due date extension or a temporary hardship plan. This proactive communication can prevent a late payment from being reported to credit bureaus.

Choose the Right Card to Very

Improving your credit score is an achievable goal that significantly impacts your financial life, from loan approvals to interest rates. With consistent, positive habits, you can see meaningful changes in just a few months.

• Monitor your credit reports. Regularly check your free reports from Experian, TransUnion, and Equifax to spot and dispute inaccuracies, which helps you track progress and guard against identity theft.
• Set up automatic payments. Your payment history is the most significant factor in your score, so automating payments ensures you never miss a due date.
• Lower your credit utilization. Aim to use less than 30% of your available credit by paying down balances or requesting a credit limit increase.
• Become an authorized user. Being added to a credit card account with a strong payment history can help boost your score, provided the account reports to all major credit bureaus.
• Diversify your credit mix. Lenders prefer to see that you can manage different types of credit, so having a mix of revolving credit and installment loans can strengthen your profile.
• Limit hard inquiries. Avoid applying for too many new accounts in a short period, as each application can temporarily lower your score.

The Bottom Line

Using Very can impact your credit score, as your payment history is reported to credit reference agencies. Timely payments may help your score, while missed payments can have a negative effect.

Frequently Asked Questions

Does opening a Very account affect my credit score?

Yes, applying for a Very Pay account involves a hard credit check, which can cause a temporary, small dip in your credit score. This is standard practice.

How do late payments to Very impact my credit?

Missing payments can negatively affect your credit score. Very reports payment history to credit reference agencies, so consistent, on-time payments are crucial for a healthy score.

Will closing my Very account improve my credit score?

Not necessarily. Closing an account, especially one you've had for a while, can reduce your available credit and shorten your credit history, potentially lowering your score.