Late payment? How much will this affect your credit? | Refresh Financial

Official blog of Refresh Financial

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. However, we are currently experiencing an unprecedented situation with the coronavirus, and for some people, it's simply not going to be possible to make all of their monthly bill payments. Nevertheless,  it's critical to be aware how much of an impact late payments can really have on your credit score, and what exactly the consequences are of making even just one late payment.

First, can you find the money to pay your bills?

It may seen like an obvious question. Of course you've probably considered all your sources of money to keep your bills paid. However, just in case, we have pulled together a list of 8 expenses that can be cut when your income has been drastically reduced. For example, could you take your car off the road for a month or two, and save on insurance and gas in order to pay your credit card bill? Could you cancel cable TV for a few months to help pay your mortgage?

If you can't, what will happen if you pay your bills late?

Well, the answer depends 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 late 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. With the coronavirus pandemic sweeping the globe many creditors such as mortgage providers, car loan providers and credit card companies are offering deferrals of loan payments for up to six months. However, this doesn't' happen automatically, you have to apply. Don't just think you don't have to pay your bills for six months and it will be OK. Unless you have received approval, it will work negatively against 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 another form of credit down the road and potential lenders see this late payment on your credit report, it can easily sway their decision. Even if you've got many years of positive payments under your belt, those one or two late payments can really hurt you in the future. In many cases, paying your bills on time does not positively impact your credit score, but not paying your bills can have a negative effect on your credit score, especially once it gets sent to collections. It can also have an impact on what kind of interest rates you will be offered by lenders. The lower your score, the more you will pay in interest, if you are even offered a loan at all.

It's not worth the risk

Don't put your credit score at risk by making late payments. If, as a result of the coronavirus pandemic, you are truly unable to make your bill payments, call and speak to your loan provider and see what they can do to help. Don't just let the loan payment go unpaid as that's a sure fire way to lower your credit score.


Refresh financial offers custom credit building solutions to help you build your credit score FAST.

Leave a Reply

Your email address will not be published. Required fields are marked *


− 3 = 3

    What Canadians are saying about Refresh

    I would like to thank Refresh Financial for helping me get out of a bad spot. I never thought it was possible and almost gave up on things and then I saw Refresh Financial and and gave it a try. At first I was unsure of things but to see my credit score now makes me a believer in this program.

    – Aaron A

    “It hasn’t even been a year yet, possibly only 6-7 months, and my TransUnion score has gone up over 100 points. That was only the tip of the iceberg as recently I was able to get a consolidation loan from my bank that allowed me to move forward and make things easier for me. Talk about second chances!”

    – Angelica M

    “I am now in a position where I am able to obtain credit (just bought a brand-new car and refinanced my mortgage for a fantastic rate) and it took little to no time at all. I would 100% recommend Refresh to anyone looking to rebuild credit with as little hassle as possible.”

    – Cathy M

    “I had not heard of a company doing such a thing before someone suggested it to me and it made sense. I am not very good at saving money and Refresh Financial helped me. I have dealt with them for years now and never had a problem. The customer service is excellent and fast.”

    – Chris C

    Refresh helped me regain credit following a nasty divorce, which left me with a very poor rating. They were able to remarkably help me go from a 480 to a 600 score, in just over a year. Thank you Refresh!”

    – Deb K

    I have watched my credit score jump since being with Refresh and I have already recommended it to friends and family. Thank you for helping me build my credit faster for my future and my children’s future :)”

    – Heather T

    At first I was skeptical because I wasn’t getting funds upfront and had to make payments when I really needed the money. I’ve been in the program a year now and have noticed my credit has improved drastically!”

    – Irene L

    I have been a client of Refresh Financial for approximately 3 years. Since being a client they have improved my credit immensely. Definitely recommend this company to anybody that needs help re-establishing credit.”

    – Jason I

    “I recommend this program to anyone having credit issues. At the end of the agreement, your money is refunded to you. There were times I found myself short on cash and Refresh, with permission, used a portion of my money to clear up my arrears.”

    – Margaret L

    “I would like to thank Refresh Financial for their professionalism, great customer service and for helping get back to a better financial situation. I have always been treated with the utmost respect.”

    – Martine B

    Refresh Financial is an amazing program to help people get back on their feet. I was rock bottom with nowhere to turn. My credit was beyond poor. I would recommend them to anyone. If I can do it surely anyone else can.”

    – Matthew S

    “Great company to deal with for rebuilding credit, very simple process to get started. Good service if you ever have questions.”

    – Mike L

    This business truly cares about its clients. The customer service is always quick to return calls or emails. Their online portal functions very well so as a customer you are always updated as you progress with your loan.

    – Phil J

    “Refresh Financial has made us more aware of how to take care of our financial situation and be more responsible, and making payments on time is rewarding in the end for credit. Thank You sincerely.”

    – Rocky M.

    “Refresh financial is great!!! They boosted my credit score, helped me save money and helped my husband and I buy our house;) I was not only a number to them, they stayed in touch and helped me out along the way. Answered all my questions and concerns.”

    – Sara B

    “Refresh Financial had been exceptionally good to me! I’ve just been out on medical leave and they have accommodated me with my payments without hesitation!! I was in a really bad spot with my credit and they have helped me to try and correct it!! Bravo!”

    – Shannon B

    This company has been nothing but fantastic. They have gone above and beyond to help me. This program has given me the relief and peace of mind I need. I would certainly go back to them and give them names of people who could use this.”

    – Shirley K

    The financial services products are excellent for new immigrants, low-income earners and small business owners. Loans, savings and credit building all in one solution is a perfect fit to help with financial goals and stability.”

    – Soraya H

    “After successfully going through a credit rebuilding loan, I was able to use my built-up equity to purchase a newer vehicle and I have since been approved through a financial institution for a loan.”

    – Tanya W

    “I made some poor credit choices when I turned 18 and have always had this lingering thought of how am I ever going to better my score. Since being with Refresh I have realized that I took the right step towards bettering my future.”

    – Taylor B

    “Thank you Refresh, and my relationship manager for giving me the tools for a better score with a secured card and two credit builder loans. I feel absolutely confident I’m on a better path to financial success. I am happy to be a long term client.”

    – Trevor P

    I’m so excited I’ve joined refresh! I’ve already seen a huge increase on my credit after the first month! The staff are a delight and make this so easy to understand. I strongly recommend Refresh Financial even if you have good credit this will give you a boost and you’re saving money with the reverse loan!”

    – Wayne B