You may be faced with a decision of skipping monthly payments because you do not have the money to pay for all of them. Before you make the decision of putting off those monthly bills let’s analyze it and see how skipping monthly payments affects you and see what happens in each case.
Missing Your Utility Payment
If you miss your utility payment, you’ll get charged a late fee. Most utility companies will not disconnect your service after a single late payment. But if you miss more than one payment, your services might be at risk of being disconnected. To get reconnected, you may have to pay a restore fee to have your services restored.
Missing Your Cell Phone Payment
Missing a phone Payment incurs a late fee. Your service provider might temporarily disconnect your service and charge a reconnection fee.
Missing Your Mortgage Payment
If you miss your mortgage payment, some lenders may begin the foreclosure process after a single missed payment while others will give you a 90 days period. In either of these cases, the late payment is included in your credit report and will affect your credit score. In the next month, you will need to make pay two mortgage payments plus the late fee to meet up.
Missing Your Credit Card Payment
Once your credit payment is 30 days late, your creditor reports the late payment to the credit bureaus. Note, your credit score will be affected. Your late fee could get up to $25, or $35 if you’ve defaulted another time in the past six months. For credit cards that have a rewards program, you may not be able to use your rewards until you meet up. After you miss two payments, your interest rate may increase and you may lose any promotional rate on purchases or balance transfers.
Missing Your Auto Loan Payment
The lender reports the late payment to the credit bureaus after 30 days if you miss your auto loan payment. The late payment affects your credit score, you get charged a late fee and your interest rate could increase. The lender may probably not start the repossession process after a single missed payment. If you don’t get caught up your vehicle is at risk.
Missing Your Student Loan Payment
Here, your late payment will be included in your credit report and reflected in your credit score. You’ll get charged a late fee and your interest rate could go up.
How Skipping Monthly Payments Affects You Generally
Whenever you default on your payment, you can count on being charged a late fee. Once your next bill is due, you’ll have to make two months of payments plus the late fee. Thus catching up might be difficult and it’s more difficult the higher your monthly payments are. For this reason, mortgage and auto loan payments are often the most difficult to get caught upon.
If you can’t afford to make a payment, it is best you call your creditor, lender or service provider and intimate them rather than skip your payments without notice. You can inquire from them if you can have the due date extended and late fees waived.
On a final note, it is advised, that you try to pay those creditors and lenders who report to credit bureaus: your mortgage, Student loan, credit cards, or car loans. This is because if you do not, your credit score will be affected if you miss a payment. Overdue payments have a way of winding up on your credit report if they enter a default status or are passed along to a collection agency.