Introduction
If you have missed a payment on a credit card, loan, or utility bill, you may be wondering whether it will stand in the way of getting a mortgage. The short answer is that missed payments affect mortgage applications, but they do not automatically rule one out. Lenders assess your full credit profile rather than focusing on a single entry. Understanding how your credit history is viewed during a mortgage application can help you make better decisions and approach the process with greater confidence.
What Counts as a Missed Payment?
A missed payment occurs when you fail to make a required payment on time for a credit account. This can include credit cards, personal loans, mobile phone contracts, utility bills, or existing mortgage commitments. Even a single missed payment can be registered on your credit file by the relevant lender and will be visible to future lenders during a mortgage application credit check.
It is worth noting the difference between a late payment and a missed payment. A late payment means you paid, but not on time. A missed payment means no payment was made at all during that billing period. Both can appear on a credit reference agency report, but they carry different weights when a mortgage underwriter reviews your application.
How Mortgage Lenders View Missed Payments
When you apply for a mortgage, the lender will carry out a thorough credit file review as part of their affordability and risk assessment process. They want to understand whether you manage debt responsibly and whether you are likely to keep up with mortgage repayments over the long term.
During this credit history review for mortgage purposes, lenders will consider:
- How recent the missed payment is. A missed payment from several years ago carries far less weight than one from the past twelve months.
- How many missed payments appear? A single isolated incident is treated differently from a pattern of missed payments across multiple accounts.
- The type of account affected. Missed payments on secured debts or an existing mortgage are treated more severely than a missed payment on a store card or utility bill.
- Whether the account went into default or arrears, mortgage arrears and defaults significantly affect mortgage eligibility and lender criteria.
Mortgage lenders use their own internal scoring systems alongside credit reference agency data. This means that one lender may decline an application that another would approve, which is why specialist mortgage advice can be so valuable in these situations.
Does a Missed Credit Card Payment Affect a Mortgage Application?
A missed credit card payment can affect a mortgage application, though the impact will depend on how recent it was, whether it was resolved quickly, and the wider context of your credit profile. A single missed credit card payment that was resolved several years ago, followed by a clean credit history, is unlikely to be a major obstacle.
However, if the missed payment on a credit card is recent, or if it sits alongside other issues such as defaults, loan arrears, or a low credit score, lenders may view your overall credit profile as higher risk. This could affect the rates available to you or limit the range of lenders willing to consider your application. If you are unsure how your credit history may affect your options, speaking with Mortgages RM before submitting any application is a sensible step.
What Happens if You Miss a Payment During a Mortgage Application?
A missed payment during a mortgage application is a particularly sensitive issue. Once your application is underway, lenders carry out a credit file review at various stages. If a new missed payment appears during this period, it could lead to the lender withdrawing an agreement in principle or declining the full application.
It is essential to keep up with all financial commitments while your mortgage application is being processed. This includes credit card minimum payments, loan instalments, and any subscription or utility agreements linked to a credit agreement. Financial stability in the period leading up to and during a mortgage application is something lenders pay close attention to.
Can You Still Get a Mortgage With Missed Payments?
Yes, it is possible to obtain a mortgage with missed payments on your credit file, but your options will vary depending on the circumstances. Some lenders specialise in mortgage applications from borrowers with adverse credit history, including missed payments, defaults, or previous arrears. These are often referred to as bad credit mortgage products.
Key factors that will influence your eligibility include:
- Time elapsed since the missed payment. Older issues are weighted less heavily by lenders.
- Your deposit size. A larger deposit improves your loan-to-value ratio and can reassure lenders.
- Your overall credit behaviour since the missed payment. Demonstrating a responsible borrowing history following any issues is important.
- Your income and affordability. Lenders will conduct full affordability checks and assess your loan-to-income ratio regardless of credit history.
- Whether you can provide a credible explanation, some lenders will consider a written explanation for missed payments, particularly if caused by circumstances such as illness, redundancy, or administrative error.
Manual underwriting is available through some specialist lenders, which allows an underwriter to assess your application beyond automated credit scoring. This route is often accessible through a mortgage broker with experience in adverse credit cases.
How to Improve Your Chances Before Applying
If you have missed payments on your credit file, there are steps you can take to strengthen your position before approaching lenders:
- Check your credit file. Obtain a copy of your credit reference agency report and review it carefully for any errors or outdated entries.
- Register on the electoral roll. This is a simple but effective way to improve your credit profile.
- Avoid making multiple credit applications. Each application creates a hard search on your file, which can reduce your credit score.
- Build a track record of responsible payments. Consistent on-time payments over a sustained period will gradually improve your credit profile.
- Reduce existing debt where possible. Improving your debt-to-income ratio strengthens your affordability position.
- Save towards a larger deposit. A stronger deposit position improves your loan-to-value ratio and broadens the range of lenders available to you.
If you would like guidance on improving your credit before a mortgage application, Mortgages RM can assess your current position and advise on the most effective steps to take.
The Importance of Working With a Mortgage Adviser
When your credit history includes missed payments or other adverse entries, the mortgage market can feel difficult to navigate. Not all lenders are visible on comparison sites, and many specialist lenders operate exclusively through mortgage brokers. A whole market adviser will have access to a wider range of lender criteria and can match your circumstances to the most appropriate products.
Mortgages RM works with clients across a range of credit situations, including those with missed payments, defaults, or previous mortgage arrears. Whether you are a first time buyer, planning to remortgage, exploring a product transfer, or considering buy to let options, professional advice can make a significant difference to the outcome of your application.
Conclusion
Missed payments on your credit file do not make a mortgage impossible, but they do require careful handling. The impact on your mortgage application will depend on the type, timing, and frequency of missed payments, as well as your wider financial profile. Taking proactive steps to understand your credit position and seeking specialist advice early can significantly improve your prospects. This is particularly important if you are planning to fix your mortgage or secure a new deal, as lenders will carefully review your credit behaviour before offering favourable terms. If you are concerned about how your credit history may affect your mortgage application, contact Mortgages RM for honest, professional guidance tailored to your situation.
