It is important to note that any late payment gets recorded in your credit report as well which makes your credit score to fall further and making it difficult for you to qualify for best terms and interest rate on loans and credit cards from the lenders.
Late payment of dues and your credit score go hand in hand. Here is the breakdown of the impact of late payment on your credit score based on the number of days you have got late in making your payments.
You need to give late payment fee and perhaps a higher APR, but it does not leave any effect on your credit score if you pay before the 30 days.
This record will damage your credit score if it is too often. A single 30-day late payment will not cause lasting damage to your score. A payment that's at least 30 days past due could drop your score by 100 points.
One late payment does not cause long-term damage to your credit score. However, if it is often then it would hurt your credit score.
This record will hurt your credit score for up to seven years. If you have already missed the payment once, you’re considered more likely to do it again. As a result, your credit scores will drop.
At this point, your debt is usually “charged off” or sold to a third-party collection agency. Both occurrences are reported on your credit report and hence, your credit score will reduce further.
The late payments on your credit report can stay for seven years after the account was initially reported late. However, the impact on your credit decreases with time if you have been consistent in paying your outstanding dues on time.
If you are a credit cardholder or borrower of any type of loan, you must remember their due date and try to pay on time to avoid paying a late fee on non-payment. Here are the following tips which will help you to make sure that you don't miss your payments.
Auto debits facility can be beneficial for those who forget to make the payments by the due date. Autopay means authorizing your credit card issuer or lenders to automatically deduct the outstanding amount or minimum amount from your bank account on a certain date every month. This saves you from the hassle of remembering to pay your debts on time.
Another way in which you can effectively pay your outstanding dues on time is to set up reminders instead of relying on your memory. Calendars or online reminders on a phone are the best ways to keep track of what you have to pay and when it needs to be paid. Also, you can ask your creditors to provide you with online alerts regarding your due date for payments.
Instead of paying monthly, it’s best to pay weekly on the account. By doing so, you may find it easier to control your overall balances and it will help you pay everything off a bit faster.
This would help you to achieve an excellent credit score and will prevent you from paying high-interest rates and late fees.