How bad is a single late payment marker?

moneywow1

So I forgot to pay my water bill.

No excuses. I had the money in my account, but never got around to setting up a direct debit and I kept meaning to pay but forgot. It's literally the only bill I have where I don't have a direct debit.

Other than this I have a full history of on-time payments. A couple recent searches (credit card and mobile phone contract)

~ £25k salary, with one £5k credit card (~10% utilisation) and an Amex charge card.

I don't really have the need for another credit card or loan any time soon, but would this be a big problem if I were to apply for a mortgage in the next couple of months or so?

Thanks

ThisnotThat

moneywow1 said:

So I forgot to pay my water bill.

No excuses. I had the money in my account, but never got around to setting up a direct debit and I kept meaning to pay but forgot. It's literally the only bill I have where I don't have a direct debit.

Other than this I have a full history of on-time payments. A couple recent searches (credit card and mobile phone contract)

~ £25k salary, with one £5k credit card (~10% utilisation) and an Amex charge card.

I don't really have the need for another credit card or loan any time soon, but would this be a big problem if I were to apply for a mortgage in the next couple of months or so?

Thanks

There is no right, single, answer to this.  Some providers might have a problem with any late payments, others may not.  It'll probably be wise to speak to a broker who will know who to approach and who not to.  It's also easier (generally) to plead your case via a broker rather than via a personal application.

MaryNB

One missed payment generally isn't that bad. If everything else on your file is fine I wouldn't lose too much sleep over it. Go via a broker if you're concerned.

MattMattMattUK

moneywow1 said:

So I forgot to pay my water bill.

No excuses. I had the money in my account, but never got around to setting up a direct debit and I kept meaning to pay but forgot. It's literally the only bill I have where I don't have a direct debit.

Other than this I have a full history of on-time payments. A couple recent searches (credit card and mobile phone contract)

~ £25k salary, with one £5k credit card (~10% utilisation) and an Amex charge card.

I don't really have the need for another credit card or loan any time soon, but would this be a big problem if I were to apply for a mortgage in the next couple of months or so?

Thanks

It will not be a big problem, it might, depending on the lender and time since the default have an impact on the amount and/or the interest rate the lender will offer you. It is more likely to present an issue if you go direct to a lender, but if you apply via a broker they will be able to choose the lenders they know will not be bothered by it. 

It is also only one default, which lenders will generally see as an honest mistake if it is in isolation, so make sure you set up the Direct Debit as if it happens again it could then be viewed as the start of a pattern. A single mistake lenders will often treat as irrelevant, a pattern of missing payments is what they do not like. 

MaryNB

MattMattMattUK said:

moneywow1 said:

So I forgot to pay my water bill.

No excuses. I had the money in my account, but never got around to setting up a direct debit and I kept meaning to pay but forgot. It's literally the only bill I have where I don't have a direct debit.

Other than this I have a full history of on-time payments. A couple recent searches (credit card and mobile phone contract)

~ £25k salary, with one £5k credit card (~10% utilisation) and an Amex charge card.

I don't really have the need for another credit card or loan any time soon, but would this be a big problem if I were to apply for a mortgage in the next couple of months or so?

Thanks

It will not be a big problem, it might, depending on the lender and time since the default have an impact on the amount and/or the interest rate the lender will offer you. It is more likely to present an issue if you go direct to a lender, but if you apply via a broker they will be able to choose the lenders they know will not be bothered by it. 

It is also only one default, which lenders will generally see as an honest mistake if it is in isolation, so make sure you set up the Direct Debit as if it happens again it could then be viewed as the start of a pattern. A single mistake lenders will often treat as irrelevant, a pattern of missing payments is what they do not like. 

I took it as just one missed payment rather than a default. Big difference between the two in terms of impact. 

sourcrates

People who have multiple defaults, Bankruptcies, and insolvencies on their credit files still manage to obtain a mortgage.

So one little late payment on a water bill isn`t going to matter a whole lot.

K_S

@moneywow1 Will it stop you from getting a mortgage? No. Depending on how high your LTV is, it may mean that you fail the lender "credit-scoring" for a few months with some mainstream lenders but that's it.

Most utility accounts only show on either Equifax or Experian, so you could always avoid the lenders that use the corresponding file.

moneywow1

Thanks everyone

DCFC79

It's down to the lenders of they see it as a problem or not, it probably won't be an issue.