Defaults same as Early arrears?

twoyearsfromnow

I have about 6 'early arrears' marked on several credit cards over the last 6 years. They are only for 1 month as I caught up the next month. By September a few should have dropped off leaving just a couple.

I hear people mentioning problems as they have defaults on accounts going back a few years. My question is do mortgage lenders treat early arrears the same as defaults? If not how bad are early arrears in mortgage\credit terms?

Thanks

kingstreet

No. A late payment is a late payment.

Late payments show like this on your credit file "00010001001000."

A missed payment is a missed payment.

Missed payments appear like this "000112210000000."

A default is three consecutive missed payments.

A default would show "8888832100000000" as the code changes to 8 once the default is registered.

twoyearsfromnow

Thanks kingstreet.
So are missed payments treated the same as defaults by lenders or not seen as bad?

kingstreet

No. A late payment is not treated like a default.

A default is three months consecutive missed payments, so it is considerably worse.

However, a weak case at a high LTV might well fail credit score with a late payment where a strong case with a default but at a lower LTV may pass.

You cannot look at one item in isolation. It's the "blend" which determines the outcome.