What Happens When You Miss Payments on Your Credit

Missing payments on your bill is never has a good consequence. Because credit activity is reported to the credit bureaus any late payment will have an adverse effect on your credit score. Many times people are faced with a financially tight situation. This may be a particular month or a couple of months when unforeseen expenditure make you feel hard up for cash. So you to the most natural thing and avoid paying a couple of Wales at one such as credit card, utility or a mobile phone. Before you make such a decision casually consider the long-term effects that such an action could have on your finances.

Missing a mortgage payment — a lender can start of the proceedings for foreclosure in case the borrower fails to make the payments. Although the lender usually will not do this after a single best payment, he will be well within his rights to do it if he so wishes. You also risk the lender increasing the interest-rate and charging you a late fee on your mortgage loan. Even a small change in the interest-rate on a mortgage loan can amount to a lot of money in the long run.

Missing a credit card payment — typically a credit reports a missed credit card payment after the payment has been delayed for more than 30 days. Once such a payment gets reported to the credit bureau it will stay on your credit report for a period of seven years. Future lenders may disapprove of your credit application based on this single negative entry. You will also get charged a late fee and risk getting your interest rates increased by the lender. The rule of universal default also enables other creditors to increase the interest-rate even though you were a late on another credit account.

Utility bills — most of the utility companies to not discontinue the service immediately after a single best payment. However you will get charged a late fee in your next bill. In case of mobile phones you service may get temporary disconnected till time that you make the payment.

Loans — getting late in making payment on a loan means that you run the risk of having the credit increase your interest rate as full as charging you are late fee. Also if this payment gets reported on your credit report, it will affect your credit score. Late payments usually stay on the credit report for a period of seven years.

Missing a payment and being charged a late fee along with a hike in the interest-rate maybe a consequence that will make meeting your financial obligations in the future even more burdensome. For this reason it is advised to not to skip payments on your bill casually. Paying for essential services and important credit obligations is important and should be planned for in advance. Even if you have a problem making the payment for a particular bill in a month doesn’t just skip it. Give the credit a call and discuss the situation with him requesting him to forego extra financial charges and late fee. Some creditors may even be willing to extend the due date or not report the late payment to the credit bureau immediately.