As interest rates continue to fluctuate, rates on loans and credit cards are subject to change during these difficult times.

And now more of us face having to evaluate our finances in reaction to these changes, such as double checking repayment amounts on our loans and credit cards.

As a result there has been an increase in missed payments on loans, according to research carried out by a leading market research company.

It is predicted that around 3% of those who have taken out loans have missed a payment in the last six months - compared to 2% in 2006.

And whilst most of us have been late with payments at least once during our borrowing, such overviews could have a harmful effect on your credit score. However, if informed of mitigating circumstances - such as illness and divorce - lenders will usually let one-off payments slide, providing you contact them as soon as possible and explain your situation clearly and truthfully.

Most payments can now be arranged using direct debits in order to help organise finances more effectively, allowing borrowers the opportunity to plan their monthly spending more effectively.

Missing regular payments, however, is sure to set lenders warning bells ringing and have a detrimental effect on your credit score, which will ultimately affect future loan applications as you would be considered a higher risk to potential lenders.

Records of missed payments usually remain on your credit record for 36 months, along with other factors such as County Court Judgements (CCJs) and bankruptcies. Joint bank accounts can also have an effect on future borrowing, with any applications being affected if either you or your partner has poor credit ratings.

It is still possible to lend with blemishes on your credit report, however you will usually have to pay a higher rate of interest than usual policies. For those wanting to take out secured loans, it is advisable to evaluate finances carefully, and seek advice before securing such a loan. Constantly missed payments in this case could mean repossession of your property.

Keeping a clear and concise credit record is essential to both loan and mortgage applications, but also for any future employment prospects. Employers will now evaluate potential employees' credit scores to assess any financial risk before considering employment.

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