Late Payment in Last 12 Months

MervC

Hi,
I have a loan account which has recorded 1 late payment against it 9 months ago and it is due to be settled in 4 months' time.
I have recently come into a bit of extra cash and could settle it now but I am not sure if this is the best thing to do...
If I let the loan run its course and I settle in 4 months' time then updated payments on my credit report will mean that there are zero late payments in the last 12 months.
If I pay off the balance now and the account is marked as settled would it still show zero late payments in the last 12 months in 4 month's time or does everything stop when an account is settled, showing 1 late payment in the last 12 months until the account drops off my credit report?
Any advice on how late payments in the last 12 months count after an account is settled would be appreciated.
Thanks
Merv

cloudcuckooland_3

I think everything stops when the account is settled showing one late payment in the last 12 months HOWEVER rather than worry about your credit rating I would settle this account now because: in my experience, better to pay off debt than postpone it if you have the money or it won't be long before you find something else to spend it on!
I myself will shortly be receiving a tax rebate - I will be biting the bullet and paying off a debt quick rather than making regular payments to improve my credit score - maybe you have more self control?
My main ethos is - get rid of debts asap, 'cos reason I ran 'em up in the first place was because I was too vunerable with money, but up to you.

sueeve

Part of the decision is financial, working out which way is most cost effective; the other part of the decision is psychological. How will you feel if the debt is behind you, and if you don't pay it off now are you sure you will keep the money ring fenced for later? As you got it a bit wrong before I would think your best choice would be to get rid of the debt.

MervC

Thanks for your opinions and advice. I'm no wiser about the question posed but appreciate you taking the time to reply. :-)

dontunderstand

Hi, in my opinion, as you've managed to keep the payments up & have no other late payments I think in your position I'd opt to pay monthly. That way your credit report is clean too! If not it will show as settled but will always show the 1 mth late until it drops off & that takes 6 yrs from last payment I beleive.
dontunderstand

dreamdreamer

Yep I had one late payment in my last year with O2 in 2005 and it's still showing even though the account has been settled for nearly six years. Doesn't seem to have affected my ability to get credit but I'd wait for it to drop off before settling if I did it over again.

lvm

Just curious as to which CRA you are using? I've just had a little look at my Experian report to confirm this but it confirms how many late payments in the last 36 months, or however long the account has been active - whichever is longer.

Anyway, it's not going to negatively affect your ability to get credit having just 1 late payment. Many have them and it's an easy mistake.

Do yourself a favour and save the interest and pay off the account - that's my opinion anyway!

brokeinlondon

I think if I was in this situation, I'd just pay it off, because I no longer care about my credit rating, as I never want to use credit again!

Except for when I can eventually take out a mortgage of course...

MervC

Thanks dontunderstand and dreamdreamer. The money is safely tucked away and I won't pay any extra interest as it is within the term of the loan so they can wait and hopefully the 1 late payment in the last year will shift into the last 2 years. :-)
lvm: I have used Experian (Credit Expert) and Equifax - They both show the same history (and the 1 late payment) for all accounts that I have had, settled and outstanding, so everything seems fine.