Missing credit card payments is the big deal than it seems. Your credit card drive application company will never come to your door after missing a payment, but actually take action behind the scenes. Your creditors will continually response you back against your late payment and it will affect you for months or even years. Knowing the consequences of late payment of credit card should be enough to make an extra effort to pay on time.
Four things happen against your late payment
Your credit card will be considered late if it is deemed to be received after the termination date or due date. According to the Bad Credit Car Loans Canada, this is what happens if your credit card is late:
1- You give the late fee to your creditor. Against your late payment your next statement includes a fee for late payment or it will be considered as the losses. Late fees typically range from $14 to $36, it depends on the tariff, credit car late fee policy. There may be a bit relaxation if you deliver late payment first time in the last six or more than six months. But late fee will be charged each month if your payment is delayed or reduced than the minimum amount.
2- The interest rate will be doubled. If you pay your dues after 60 days or more than 60 days so it may cause to increase your interest rate. Lenders not only punished with a late fee, but they will also increase your interest rate as the hard punishment and you have to bear the highest rate of interest on your credit card. The rate of higher interest increases their borrowing costs, and your payment becomes more expensive to manage the balance and extends the time to pay the cost.
If you do six months of payment on the time, then it is required to dispatch the card to return to the good price, but only for the balance above. Purchases made after a fine figure existed, can still receive a higher rate depending on the terms of your credit card.
3- The late fee becomes your payment history. If you late for the payment for more than 30 days the entry on your credit report is added and can be kept for seven years. If the next payment is passed, the entries are updated in 60 days, and so on, every 30 days until the account is recharged after 180 days.
4- Your credit score may drop. Because payment history makes up 35.5% of your credit score, late payments can have a significant effect on your score, affecting your ability to get new credit in the future. How much your credit score drops after a late payment depends on the other information in your credit score – generally, the better your credit, the more points you stand to lose.
5- Credit score may fall because 35.5% of your credit-score of your payment history. The late payments can really impact on your credit score, and it can really affect your need in future to get the new car loan in the future. The other information in your credit account also influences on your credit score and those other information also describes the cause of bad credit.
Important Steps to Avoid the Plenty
- The Late payments will be reported after the days to the credit bureau. So you can make the payments, including commissions and ultimately prevent any damage to your credit score while you late for your payments.
- When you late for 60 days for your payments, then lender can increase the interest rate as fines. You may also lose some advance features of interest rate that you’ve got at the agreement. Avoid misuse of your credit card and safe it from all criminal activities because the worse late payments or criminal actions can freeze your all rights to use the credit and strictly penalized.
- If you have missed six payments so it means you are 180 days late, the card issuer is usually resolves the account and writes as a loss. Depreciation is on your credit report and remains seven years.
If you miss a single payment of a month or two is not so much bad for your credit history. But missing more than two payments for a month or two is worse and late or missing payments for three months, losing only once in the last three months, is like a big loses. So pay your dues at the right time to get the good credit reputation. Hopefully the above mention information will help the people who are facing bad credit loans issues but you can also consult with the lenders because they are expertise in Bad Credit Loans Canada and can suggest you more convenient solution as per your needs.