Each month the finance company needs to send the records back to the credit reference agency and update the current status of each account they have on file. This is done electronically and usually fazed in batches over the month, if it's a large finance entity; monthly if it's a smaller company.

When you fall past due, it will not show immediately that you are one month in arrears on your credit file. You will have approximately three weeks before you run the risk of your credit file showing a full one payment in arrears, or as the credit reference agency states ?One down?. Certainly after four weeks you will be at the critical point of the account showing a level of deterioration. Obviously once it shows ?one down? you will need to bring the account up to date as soon as possible otherwise your credit file will be impaired for the future. making the payment will in turn ensure that your credit file is then updated on the next "batch". However, you should remember that the historical payment history remains, so you will always be seen and shown as being one down in that month from the credit reference agency. Whilst thats not so good, its important to stress that if the current status of the account is up to date and theres only minimal "one downs" showing, this shouldnt be a problem to your credit rating.

If you're looking to obtain things like credit for a vehicle or other type of loan and your more than one down, you will immediately struggle, this is because the underwriters will think that you are currently experiencing credit problems, as your account has just gone one down and probably reject your car finance application. Rejected finance applicants will need to contact more "open minded" lenders, classed as sub-prime.

Now you know a little more about the credit file updating, you should be able to manage your accounts a little better.