Borrowers pay more after missed payments

Beccy Boden Wilks of the Money Advice Trust suggested that because lenders adjust interest rates according to the reliability of each borrower those with a recent record of failure will have to pay more to compensate for becoming a greater liability.

She also cautioned borrowers who had failed to meet payments that, depending on the amount of money and length of time for which they had not paid, they might not receive any more credit at all.

“When you apply for credit lenders will usually complete a credit check,” Ms Boden Wilks explained.

“Defaults registered on your file may result in potential lenders believing you to be a high risk borrower… you may therefore be refused credit from certain lenders or offered a higher interest rate.”

More and more people are having to deal with the challenges of keeping their personal finances under control, with Britain’s total debt now up above the £1.1 trillion mark.

Borrowers are urged to maintain a tight ship when it comes to servicing their debt in order to avoid having to pay more for credit in the future.