Late Payment? How Much Will This Affect Your Credit? | Refresh Financial

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Late Payment? How Much Will This Affect Your Credit?

 Late Payment? How Much Will This Affect Your Credit?

Late payment? How much will this affect your credit? Most of us already know that late payments will hurt our credit score. But how much of an impact will it have? What exactly are the consequences of making even just one late payment?

It Depends

The answers to these question depend on whether or not your creditor reports these late payments to the credit bureaus. If you've been excellent at making your payments on time, your creditor might choose to give you grace on your first payment. However, don't bank on the forgiveness of your creditors. Payments that are 30 days past due have likely been reported to the credit bureaus. This will negatively impact your credit score.

A late payment can stay on your credit report for up to six years in Canada, and the lender you owe can keep those records for much longer. If you have a late payment on your credit report that you still need to pay, the longer you wait, the more it will hurt your score. It's in your best interest to get that bill paid off as soon as possible.

When you apply for credit and your potential lenders see this late payment on your credit report, it can easily sway their decision. It can also have an impact on what kind of interest rates they will offer you. Bottom line, the lower your score, the more you will pay in interest.

It's Not Worth The Risk

Don't put your credit score at risk by making late payments. Prioritize when payments are due so that instead of tearing your score down, you'll be building it up! Make sure you have an emergency fund for those unforeseen moments, that way you won't be caught off guard, and your score will continue to increase.

Have you ever had a late payment on your credit report? How did it affect you? Let us know in the comments!

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