Your monthly bills are coming due and you just don’t have the money to pay all of them. If you’re like many people, you make a decision to forgo one or more of the bills, but which one do you skip. Surveys show people are more likely to skip a credit card bill than utility or cell phone bill. Before you make a decision about putting off bills until next month, think about what will happen in each case.
- Mortgage. Your lender begins the foreclosure process. Some lenders start the process after a single missed payment while others will give you ninety days. In either case, the late payment is included in your credit report and will affect your credit score. You will likely receive a late fee and an interest rate increase.
- Credit card. Your creditor will report the late payment to the credit bureaus. Your credit score will be affected. You’ll get a late fee and an interest rate increase. Thanks to universal default, your other creditors might increase your interest rate too.
- Utilities. You’ll get charged a late fee. Most utility companies don’t cut off service after a single late payment.
- Car note. The lender will report the late payment to the credit bureaus. The late payment will affect your credit score. You’ll be charged a late fee and your interest rate could increase. In most cases, the lender won’t start the repossession process after a single late payment.
- Cell phone. You’ll get charged a late fee. Your service provider might temporarily disconnect your service and charge a reconnection fee.
- Student loan. The late payment will be included in your credit report and reflected in your credit score. You’ll be charged a late fee and your interest rate could go up.
Whenever you miss a payment, you can count on being charged a late fee. When your next bill is due, you might find it harder to make the payment with the late fee added in.
Try to avoid skipping payments altogether by planning ahead and living below your means.
If you find you can’t make a payment, don’t just skip it. Call your creditor, lender, or service provider and let them know you’ll have difficulty making your monthly payment. Ask if you can have the due date extended and late fees waived. Make every effort to pay those creditors and lenders that report to credit bureaus. Otherwise, your credit score will be hurt if you miss a payment.
