What Happens When You Miss A Bill Payment?
Everyone above a certain age has bills to pay.
No matter how you live your life, you end up having at least several each month. In fact, it’s not uncommon for people to accidentally miss a payment from time to time.
Anyone who claims to have never forgotten an invoice is lying or has forgotten that they forgot.
Jokes aside, missing a payment – intentional or not – can have a big impact on your financial goals. You might not think about it, but it could easily delay your plans in more ways than you think.
You will end up paying more
Missed payments can result in late fees, higher interest charges and higher interest rates; depending on what you missed and how long it has been unpaid.
For example, many telephone service companies may not charge late fees if you are a few weeks late with your payment. However, most major telecom companies impose some sort of financial penalty for non-payment of monthly bills to try and make sure customers keep up with payments.
Likewise, credit card companies charge a fee if you miss the minimum payment on your bill at the end of the month. These late fees can be quite significant, especially if you constantly forget to make your payments. For example, Citibank will charge you up to 1% of the total amount owed if you miss a payment.
As if that weren’t enough, you’ll end up paying more interest as well. Being late with your credit card payment will lower your interest rate from 15% to 17% or 18% per annum.
These fees and charges can potentially add up and eat away at your ability to pay bills, making it much harder to settle your debts.
It may show up in your credit score
Any missed bills will not affect your credit score. In most cases, there isn’t too much penalty for missing a payment for your washing machine. Unless you’ve missed a lot of payments and your lender has listed you as a defaulter with a credit bureau.
However, credit reporting agencies take payments to utility companies, credit card providers, and financial institutions much more seriously.
Even if you forget to pay the small amounts remaining on your bill after you interrupt service, the utility company may choose to report this non-payment after a certain period of time. It is best to have a discussion with your lender if you are having difficulty repaying your loan or credit. Many lenders continue to extend repayment assistance, for example extending the moratorium.
Reminder! Failure to pay your electricity, water, telephone, and other non-bank payments can still affect your credit report. For example, the absence of these utility bill payments will appear under Credit Reference in Experian’s PCRP (Personal Credit Report Plus).
A bad score can lead to many financial problems
Taking a credit score isn’t something that can immediately affect you in your day-to-day life, but it has a much bigger financial impact than you might think. This is because banks and other financial institutions use it to measure your quality as a customer.
A lower credit score tells these companies that you may be unreliable with payments or even fail to repay your loan. This can cause difficulty in obtaining credit products like credit cards or loans of any kind. It can also lead to frequently rejected applications for financial products or an offer of loans at a higher interest rate.
In turn, this makes it a bit more complicated to achieve your long term life goals by preventing you from being able to get a loan for your dream home or by delaying plans because you are spending more of your paycheck. in loan repayment.
What Can You Do To Keep Your Credit Healthy?
Don’t let your hard work keeping up with your monthly home and auto loans to go to waste with a few missed utility bills. Even amounts as low as RM10 in a long-forgotten phone bill account for a service you canceled long ago can affect your credit health.
When this happens, you’ll have to put in extra effort to regularly pay your bills on time to get your creditworthiness back on track. Making up for a small missed payment took a lot more time and effort.
- Check your credit score
It’s the best way to keep up to date with your credit status. It gives you an idea of how you are managing your credit and also gives you useful information about your missed payment history, including bills you may have forgotten. This credit report will provide a summary reference for what you did wrong to help you determine what to do next (hint: it is very likely that you will pay the bills on time). How you proceed usually depends on your situation. Financial advice is not a universal solution.
- Consider setting up automatic transfers
However, once you’ve figured out the plan, it would help to automate your payments for common items like monthly utility bills. That way, you won’t end up forgetting to pay the bills and help break the downward spiral.
- Continue to monitor your credit status
You should also check your credit score every few months to see how you are doing. You might feel the need to check in more frequently to get a sense of accomplishment, but rating agencies usually take a few months to change your credit score.
While there are many other factors that can affect your credit score, one of the most important and probably the most common factors is how quickly you get your loan and bill payments. To make sure you are on top of your progress in improving your credit score, we recommend that you check your score every 3 to 6 months.
Keep your goals on track with PCRP from Experian
If you’re looking for a way to monitor your credit score, why not check out Experian’s PCRP. It offers a full report on your credit score, your financial situation and even includes updates to protect you against identity theft.
How Experian’s PCRP Helps Maintain Your Credit Health:
- Gather information from Bank Negara Malaysia’s Central Credit Reference Information System (CCRIS).
- Find out if there are any disputes against you, or even if you still owe PTPTN money.
- The only ISO certified credit reporting agency in Malaysia to provide alerts when financial institutions inquire about your credit.
- Let yourself know if someone is trying to take out a loan on your behalf.
It’s a comprehensive credit report that helps you decide what needs to be done to keep your financial goals on track.
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