Did you miss a payment on a credit card? id so, are you experiencing some consequences of not making payments right away. Not paying your monthly dues on time could hurt your credit score. If you make missing payments a habit, then your credit score will drop and it will need more time and effort for you to regain your score.
With a damaged credit score, it will be difficult to get approved for loans and credit products. In addition to that, you might find it tough to get an apartment, job, or even secure a cell phone contract.
Effect of Late or Missed Payments to you
If you missed or late payment, you can expect a negative impact that including the following:
Late penalty fee charged. If your bill is paid late, even for a day or two you may be charged a late fee which you will see on your next statement.
Increase in interest rate. If you pay late on your bill payments, your creditor may penalize you with a higher interest rate than what you are currently paying. There are some credit cards, a penalty APR can be as high as 29.99%.
Notes on your credit report. If you pay your bills late for more than 30 days your lender will take action and report this information to the credit bureaus and your credit report will be updated with a note on your late payments that may reflect on your credit report for as long as seven years.
Lower credit score. Once you missed your payment, your credit score can be affected negatively. The most important factory of your credit report is your payment history, missing a single payment will definitely have a big impact.
Can Missed Payments Affect my Credit Score
Missing a house payment or late payments will definitely result for your credit score to drop. On how badly affects your score depends on how late your payments. The later the payment, the worse it may affect your score.
An example is: if your credit score is currently high, you will notice a bigger impact than if your score. Your score will be brought down because of irresponsible payment activity. And if your payments are over 90 days late, your score would be pulled down further than if the payments were 30 days late.
Will My Credit Score Be Affected By a Credit Card Payment That’s One Day Late?
If you are a day late, your credit score will not be affected as bad as 30 days late. You may incur a fee, but your credit score should not suffer.
The best thing to Do if I Missed a Payment
Pay immediately. The first thing you should do is to pay it right away. If you cannot make in full, pay the minimum balance at least. This is essential when trying to protect your credit score from being damaged.
Write a goodwill letter. Write a goodwill letter in which you ask the creditor to get remove the negative mark on your credit report.
Reset your interest rate. Late payment may result in an increase in your interest rate, your credit card issuer can reset your rate back if you can make timely payments for six straight months.
Request removal of a late payment fee. If you are in good standing, you may ask your lender or financial Institution to relieved the late payment fees for missing a payment.
Things you should do to avoid late or Missing Payments?
Most of the time consumers miss bill payments because they are simply unable to pay up when the bills come due. Whether it is a loss of a job or income, or any other situation that has impacted a person’s finances, this may result in a situation in which consumers are financially incapable of making timely payments. If you just simply do not pay attention or unable to remember to pay bills when they come due. It is helpful to set up automatic payments.
Automatic payments help you to pay your bills by their due date can help you ensure that you’re never late paying your bills because of a lapse in memory. You can set up your accounts so that the funds from your bank account are withdrawn to fulfill payment obligations.
If you’re worried about high interest and penalties, you also have an option to automatically pay the minimum amount required instead. Then, you can pay at a later date to catch up.