Late payment due to changing banks!

Mightyowl

Hi

I recently changed by Bank from Natwest to Barclays, when all my funds was transfered i was asked by Barclays if i would like them to change my direct debit commitments. I agreed with this and thought nothing more about until i recieved a letter from Agros card services stating that i missed last months payment and acquired at late payment fee of £12. I wasn't happy so rang Argos saying i'd changed banks, the person on the phone then looked at my account and said we don't have any direct debit details on our system! So i then made a payment of £50 over the phone, i wouldn't have minded but the payment i missed was the massive sum of £1.94.

Anyway i have checked my credit report since, and the late payment is on my credit file GUTTED! I'm now going to pay the remaining balance on £110 this week and close the account with Argos.

How long will this stay on my file? as i want to apply for a loan sometime in the summer and i am now worried it will affect the decision.

Moggles_2

There's a difference between late payments and missed payments. Fortunately, it sounds as though yours is the former.

Missed payments can wreck your credit rating for years, but late payments are viewed as negative only if you attract more than two in a short space of time. Even then, the effect is short-lived. A late payment drops off your file after 36 months, but it's your payment history with all your creditors over the last 6 years that counts, with particular emphasis on the most recent 12 months.

That said, I wouldn't close the account. If you do that, it stays on there for another 6 years.

Mightyowl

I've had the card 12 months and never missed a payment!

It's showing as a late payment, so would you advise me to wait another 12 months before i apply for a loan?

Oh yeah since i have paid the £50 Agros have now increase my spending limit by £500, what a effing cheek!

Moggles_2

The credit reference agencies keep late payment history on active accounts until it drops off your file 36 months later.

If you close down the account, the final 36 months of payment history stays on file for 6 years from the date the account was settled.

So, if you want your late payment to disappear from view in the shortest time possible, keep the account open and active.

That said, if your payment history is nigh on perfect apart from this single late payment, your application for a loan should not be affected.

Very best
M

Mightyowl

Apart from this it's perfect!
So will my credit score improve as i pay and the months go by! or will my score be low until it drops off my file?

Thanx

macman

Shouldn't it be Barclays you should be having a go at for failing to set up the DD? Argos can't be blamed.

Mightyowl

It's showing as set up on my Barclays online account.

I stated this to the person at Agros who said "we don't accept dd mandates from anyone but yourself even if it's from a bank"

So they sent me a new dd mandate to fill out and send back!

Moggles_2

Mightyowl wrote: »

Apart from this it's perfect! So will my credit score improve as i pay and the months go by ... ?

Yes, as it recedes into the background, this blip becomes less significant

macman

Then Argos certainly can be blamed. I had assumed Barclays had not done the DD transfer.
If Argos are defending it as a fraud prevention measure, then why don't they contact customers when they receive DD mandates from 3rd parties?

Mightyowl

macman wrote: »

Then Argos certainly can be blamed. I had assumed Barclays had not done the DD transfer.
If Argos are defending it as a fraud prevention measure, then why don't they contact customers when they receive DD mandates from 3rd parties?

I suppose it's another way of making money out of they're customers, that's reflected in them inceasing my credit limit by £500 since the late payment