What happens if I make a late repayment?

If you pay your credit card or loan repayments more than 14 days past the due date this can be recorded on your credit report as part of your repayment history information as a late payment. Only licensed credit providers such as banks and financial institutions are able to disclose repayment history information to a credit reporting body like Equifax. Telco and utility companies are not licensed credit providers and cannot supply or receive this information.

However, a default can be recorded on your credit report by any credit provider (including telco and utility companies) if you miss a payment which is more than $150 and is more than 60 days overdue. Before listing a default the credit provider must have taken steps to collect the whole or part of the outstanding debt.  This means they have sent you are written notice setting out the amount overdue and seeking payment and a separate written notice advising you that the debt may be reported to a credit reporting body. A default remains on your credit report for five years.

If you pay your credit card or loan repayments more than 14 days past the due date this can be recorded on your credit report as part of your repayment history information as a late payment. It is unlikely one late payment, depending upon how late the payment was, followed by making your repayments on time, will significantly impact your credit worthiness, however, a number of late payments could be an indication you are in financial stress and may negatively impact your credit report. This repayment history information is recorded on your credit report for a period of two years.

To try and prevent this, pay bills on time, set up direct debits to pay your minimum credit card balance and schedule loan repayments for your pay day. Talk to your credit provider straight away if you are having trouble meeting your repayments – they may have procedures in place to help borrowers experiencing financial hardship.

If you are struggling with debt ASIC MoneySmart also provides more information about managing debt.