Your monthly bills come due and you don’t have the money to pay them all. If you’re like many people, you decide to ignore one or more of the bills. But which one do you choose to ignore?
Skip Your Mortgage Payment
Your bank starts the foreclosure process. Some banks begin the process after just one missed payment, while others give you 90 days. Either way, the missed payment is reported to your credit report and will affect your credit score. Next month, you will have to pay two mortgage payments plus late fees to make up for the missed payment.
Skip Your Credit Card Payment
After missing a payment for 30 days, your creditor will report the missed payment to the credit bureaus. Your credit score will be affected. You may incur a late fee of up to $25, or $35 if you have been late again in the past six months. If your credit card has a rewards program, you may not be able to use your rewards until you catch up on the missed payment. Once you miss two payments, your interest rate may increase, and you might lose any promotional rate on purchases or balance transfers.
Skip Your Utility Payment
You will incur a late fee. Most utility companies will not cut off your service after only one missed payment. However, if you skip more than one payment, your services are at risk of being cut off. You may have to pay a reconnection fee to restore your services.
Skip Your Car Loan Payment
The bank will report the missed payment to the credit bureaus after 30 days. The missed payment will affect your credit score. You will incur a late fee, and your interest rate may increase. The bank probably won’t start the repossession process after just one missed payment. However, if you can’t catch up on payments, your car is at risk.
Skip Your Cell Phone Payment
You will incur a late fee. Your service provider may temporarily suspend your service and charge a reconnection fee.
Skip Your Student Loan Payment
The missed payment will be included in your credit report and will be reflected in your credit score. You will incur a late fee, and your interest rate may increase.
Consequences of Skipping Monthly Payments in General
When you skip a payment, you can count on incurring late fees. When the next bill comes due, you’ll have to pay two months’ worth of payments plus the late fees. Because of this, it can be difficult to catch up on payments, and the higher the monthly payments, the more challenging it becomes. That’s why mortgage and car loan payments are the hardest to catch up on.
Try to avoid skipping payments altogether by planning ahead and living within your means.
If you find you cannot pay the bill, don’t just ignore it. Contact your creditor, bank, or service provider and let them know you will have difficulty paying the monthly bill. Ask if you can extend the due date and waive the late fees. Make every effort possible to pay those debts and loans that report to the credit bureaus – mortgage, student loan, credit cards, or car loans. Otherwise, your credit score will be affected if you skip the payment. Note that all late payments can eventually end up on your credit report if you go into default or are sent to a collection agency.
Source: https://www.thebalancemoney.com/the-consequences-of-skipping-monthly-payments-960106
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