Credit Score Basics > Does paying your Sky bill late affect your credit?

Does paying your Sky bill late affect your credit?

Wollit Team2 minute read · Updated 16th September 2024

Like with any bills, paying your Sky bill late can have a negative impact on your credit score. Here is how it works, why it matters, and what you can do to protect your credit rating.

How is my credit score calculated?

Your credit score is a number that is supposed to show how trustworthy you are when it comes to borrowing money. In the UK, credit scores are calculated by three main companies: Experian, Equifax, and TransUnion.

Each company has its own way of scoring, but it usually comes down to a handful of factors:

Credit utilisation: This is how much of your available credit you are using. Keeping this low is better for your score.
Length of credit history: The longer you have had credit, the better it is for your score.
Types of credit: Having different types of credit (like credit cards and loans) can help your score.
Recent credit inquiries: If you apply for a lot of credit in a short time, it can lower your score.
And payment history: Last but not least, this is the most important factor. If you pay your bills on time, it helps your score. Late payments directly hurt your score.

How do late payments affect my credit score?

If you miss a payment, companies like Sky may report it to credit reference agencies. This means it will show up on your credit report, which lenders check when you apply for loans or mortgages.

Does Sky report to credit reference agencies?

Yes, Sky does report payment information to credit reference agencies. However, this doesn’t mean that a single late payment will ruin your score. A single late payment can lower your score, true, but if your credit history is otherwise good, the effect may not be too severe. However, if you have multiple late payments, it can have a bigger impact.

Also, if you continue to miss payments, Sky may take further action. This could include sending your debt to a collection agency or even taking you to court. If a court issues a County Court Judgment (CCJ) against you, it will stay on your credit report for six years, making it even harder to get credit during that time.

What is the difference between a missed payment and a default?

A missed payment is when you don’t pay by the due date. A default happens when a payment is very overdue, usually after several months. Defaults have a much worse effect on your credit score and can also stay on your report for six years.

What should I do if you miss a payment?

If you miss a payment, here are some steps to take:

Pay the overdue amount as soon as you can to limit the damage.
Talk to Sky about your situation. They might offer help or advice.
Check your credit report regularly to see how missed payments show up.
Add a Notice of Correction. This is a short 200-word note you can add to your report to explain your situation. Lenders might have some empathy if you missed a payment because, for example, you lost your job.
Consider setting up direct debit to avoid missing due dates in the future.

Finally, work on your credit history so that the impact of a single missed payment becomes less important in your overall credit file.

The good news is that now there are many apps that can help you build and improve credit. One such app is Wollit.

Wollit works by reporting a fixed-fee monthly subscription as a loan repayment to all credit reference agencies. This helps you build a history of timely debt repayments, which is the main factor that matters for your credit score.

On top of this, Wollit can also report your monthly rent payment to Experian. This can add another line in your credit report that shows lenders you pay your bills on time, helping you reduce the impact of a single late payment in your overall credit file.