Incomes Growing Faster than Debt in US
Mistakes happen. Families go through financial hardships or have personal issues that may prevent them from paying their bills on time every month. Unfortunately, credit card companies are not particularly forgiving. When you pay your credit bills late, it will affect your credit score.
The consequences of a late payment depend on the situation. Every person has a unique financial and credit history, and since no two are alike, there’s no set outcome. The best thing to do is to check your credit score every month so that you’re up to date on what’s going on. If a late payment hurts your overall score, you will have an opportunity to build that credit back.
How Much Will One Late Payment Hurt Your Credit Score?
Paying late may not always be a destructive force for those who have maintained good money management habits over the years. If the installment is not extremely overdue, then the effect will not be that noticeable. Additionally, many places do not report late payments until thirty days past due, so, while late fees and interest would still apply, credit reporting agencies won’t know about the mishap.
Being a responsible borrower is also beneficial. Financial institutions notice people who always compensate their creditors on time. Many banks have computers that analyze customers’ payment habits. People who keep up with most of their fees don’t incur as much damage from one late payment. Usually, the lender will let the late payment go.
What to do When You Have a Late Payment
If you do end up paying after the due date, there are a few things to keep in mind. It is better to spread out the payments you’ve missed. Late payments paid out in a timely fashion don’t affect a credit score as much, so making payments as soon as possible is a necessity.
Several late payments in a row can drop a credit score significantly. That setback stays on record for seven to ten years. A low credit score can haunt an individual that’s trying to get a loan or rent a car among many other things.
For people with good credit scores, it is essential to keep up with payments. Auto-pay, reminders, and weekly payments may be helpful if you tend to forget. If you’re going through a financial hardship, it may be a good idea to get on the phone and contact some of your creditors or bill companies. Many places have payment plans available so that you don’t have to pay late or miss payments at all.
However, if you’ve missed one too many credit card payments, there’s a significant chance that your creditor will pursue legal action against you. In such instances, it is crucial that you have legal representation. Heather Benveniste of Benveniste Law Offices is an experienced Illinois credit card debt attorney. Having spent seven years as a debt collection attorney, she is fully aware of the tactics debt collectors will implement to get you to pay up. She can use such insight to help negotiate favorable debt repayment terms. Contact us today at 1-800-497-5358 for a free case evaluation.
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