Have you recently missed your credit card payment? Your small mistake can prejudice your financial future, and you will end up paying much more.
Today, we will try to find out some of the possible reasons behind this, what the major affects you will face are, and tips that might help. Not only that, if you read till the end, we will make sure you learn new tricks that will improve your billing cycle and boost your financials.
Missed payment is not the only thing that can impact your CIBIL score. If you want to learn more about these factors, consulting with an experienced personal loan agent will help. They will check your personal finances and look for ways to get you the best possible tips.
What could be some of the possible reasons behind the late payment?
When you take out a loan or use a credit card to pay the bill, you will have a fixed time to repay the money. If, for any reason, you fail to pay the amount, the financial company will term it a late payment. Not only will you have to pay more due to the interest on the principal amount, but your credit score will also be affected.
According to financial experts, you should always avoid paying late as it will severely impact one’s CIBIL score. This will hamper your ability to take loans. No finance company will easily approve your loan application, which will delay the process.
Impacts it will have on your CIBIL score
It is not easy to predict the specific impacts of late payment. Here are some of the affects you might face.
- Usually, thirty days is the normal time for anybody to settle an existing debt situation. If you can pay the amount before that, your score will be the same. In fact, you might have an increment in the CIBIL score.
- Once the thirty-day period is over, the credit card companies will start charging interest. According to experts, this will dent your credit score.
- Over this period, the more you take time, the worse it will be for your CIBIL score.
That’s why you should always pay your outstanding bills as soon as possible. If you can’t pay the full amount at once, getting a personal loan might help.
Here are some of the important aspects you need to learn
As we have already discussed the basics of loan repayment and its impact on CIBIL score, let’s have a look at some other aspects as well.
- We have learned about the weightage of each factor deciding your CIBIL score. It has been found that the timing of your payment will have a 35% share on your credit score.
- Thus, if you don’t want your score to be hampered, stop making late payments.
- You should know that there are different types of credit rating systems in different countries. The algorithm is somehow different, and it is hard to predict. We should do the right thing while managing our finances to get the best outcome.
- When you are paying late, your credit score is affected, and you are paying extra. Both are against you. Take loans carefully and consult with experts in advance.
Tips you need to use to manage CIBIL score
We are done with the problem you might face. The following tips will get you some relief-
- Auto debit facility will help you
Do you have auto debit on? If you do that, you don’t need to remember the deadline anymore. When the time comes, the amount will automatically be debited from your debit card. Many people have had benefits from using this method.
If you have a thirty-day period to settle your debts, set the auto-payment for the 29th day. It will give you enough time without paying any extra money.
- It is so easy now to set an alarm
Even if you don’t want to make the auto-payment, how difficult is it to set the alarm? Have a reminder so that you don’t forget to pay your bills on time.
Using these simple tips, we can avoid a massive problem that can impact our financial future.
SMO- Do you know late bill payments can affect your CIBIL score? In this blog, we have discussed some of the important aspects regarding credit score and loan repayment. Read them carefully to learn more.
