Will mortgage arrears affect my credit rating?

Dear James,

How do mortgage arrears affect your credit rating? Would it prevent you from changing your mortgage to another lender?

Kerry, Dunfermline

Dear Kerry,

Missing your mortgage payments is certainly likely to damage your credit rating. A mortgage is a major financial commitment and a priority debt. Lenders, including other mortgage providers, that find missed or late mortgage payments on your credit report are likely to worry about your financial situation, particularly whether you can be relied upon to repay other commitments on time. So, if you’re in arrears just now, it’s important to work with your existing mortgage provider to bring your account back up to date.

If you are up to date now but have been in arrears in the past, you can explain any mitigating circumstances on your credit report using a notice of correction. For example, you may have struggled with past payments due to illness, redundancy or relationship breakdown. Anyone checking your report in the future will see your note and may take it into consideration. Missed payments stay on your credit report for at least six years. You can use the Experian Credit Score to find out how a typical lender is likely to rate your current credit report at the moment. (September 2014, updated April 2018)


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