What is Late Payment Impact on CIBIL Score?
Credit score is important for banks to make decision about lending to its customers. A bad credit score will nullify chances of getting credit card or loan. Out of many reasons that pose negative impact on CIBIL score, delayed and late payments are the most common one. If you default at payments, then it becomes difficult to manage funds for current and future needs, also you may be charged a high penalty along with plunge in credit score.
- Your credit report will contain details of defaulted payments and convey to banks and institutions that it is risky to give you loan.
- A low CIBIL score is harder to erase and recover from, and thus responsible financial behaviour is a must on your part to maintain a decent credit score.
- Late payments will hurt your pocket in long run with accumulated debts to be paid with penalties and degradation of credit score that will mean you can't get loan at nominal interest rates.
- If you have had a good credit score all this while, some irresponsible actions regarding paying loans and credit card bills will spoil all the honour you had and give you a bad credit score.
How to Make Payments on Time?
We understand that you may miss payments sometimes due to end number of reasons. However, the trick is to make the payments as soon as you can than avoiding it.
- If you are forgetful about the payment dates, fix a calendar schedule or inform someone to remind you. Do not ignore reminder emails from the bank and institutions.
- Manage all your finances so as to never default in repayments. Put sufficient balance in your loan account and pay the credit card bills in total.
- Avoid late payments by choosing auto-payment option. Spread your credit usage across many cards but keep it to minimum.
- Convert credit card dues to EMI when possible, and pay those on time.