What Happens If You Miss A Bill Payment?

Finances or lack thereof are something that’s on Americans’ minds a lot these days. It’s one of the biggest, if not the most significant, pieces to our livelihood. In the wake of a global pandemic, it’s even more poignant than ever. 

Six out of 10 Americans face anxiety about paying their bills. Forty-six percent of them don’t pay their bills on time. Five percent of those who pay late say they never pay on time.

If you’re in any of these categories or you soon might be, keep reading to find out “What happens if you miss a bill payment?”

What Happens If You Miss a Bill Payment: The Consequences of Missed Monthly Payments

Monthly bills can give you great anxiety. As mentioned above, many Americans feel that anxiety. Not only can you dig yourself a hole, you most likely feel shame and you’ll probably end up paying extra with late bill fees.

The consequences of missed monthly payments can vary. That depends on what type of bill it is, who you owe, and how late you are.

Credit Card Bills

The most common bills people pay late are credit cards. There are several reasons for this.

Maybe you overspent at the retail store and couldn’t make the minimum payment. Or, maybe you had to put some unexpected expenses on your credit card tab, such as medical bills or an unexpected car repair.

If you have to miss a credit card payment, missing one usually isn’t that bad. The typical late bill fee for a missed credit card payment is $35. Some companies will waive late bill fees for you once or twice a year. If you call them and explain why you’re late and offer payment right away, there’s usually no problem. 

Credit Score

What happens to your credit score if you miss a credit card payment?

That depends on how many times you miss paying your credit card bill—usually missing one monthly payment is acceptable. While some companies won’t report a late payment unless it’s over 30 days late, it’s better to play it safe and get those payments in before then if you can help it. 

It also depends on who you’re dealing with. The big banks and credit card companies have so many consumers they can’t always keep up with everything even though they have unlimited money and resources. 

The golden rule here is to pay as soon as you can. Also, stay on top of your credit file. Using apps like freecreditreport.com or myfreecreditscore.com will help you monitor everything, and you’ll be notified if there’s a problem. 

Utilities

A late utility bill isn’t something to take lightly. The last thing you want is to have your electricity, gas, or water turned off. However, you do get some leeway here. If you miss a one-time payment on your utility bill, you’ll only be charged a minimal late fee.

What you need to watch out for with utility bills is the 60-day threshold. After being late for 60-days, the gas or power company might report you to the credit bureaus. This will affect your credit score, but if it doesn’t happen often or hasn’t happened before, it won’t make much of a dent in your score.

If your account goes 90 days past due, you risk being sent to a collection agency, which will significantly affect your credit score. You’ll also be at risk for having your electricity, gas, or water shut off.

Rent or Mortgage

Getting behind on rent or mortgage payments can be devastating to your wallet and even leave you homeless if the late payments get too out of hand.

If you miss a rent payment, you’ll have to pay a fee. The amount of that fee depends on where you live. Some assess a $25 fee, while others can get up to $125 or more. Most landlords won’t report you to credit bureaus for missing one or two payments. However, if you’re late enough to warrant being sent to collections or worse, getting evicted, then your credit scores will be affected.

If you get behind on rent payments, the best thing to do is communicate with your landlord. Let them know that you’re having a hard time and why. Also, let them know that you’ll be paying soon, and if you can, provide a specific date. You might even be able to set up a payment plan with them. It’s more common than you think. Don’t forget to look over your lease agreement and see what the parameters are for missing payments. Some give more leeway than others. You can also look into some relief programs and see if you qualify.

Being late on a mortgage payment tends to have more serious consequences than late rent payments. If you miss a mortgage payment, the lender will indeed notify the credit bureaus after 30 days. There will also be late fees assessed which are in accordance with the size of your loan. If you don’t pay your mortgage, you can be evicted anywhere from two months to a year later. It depends on if you go into judicial or non-judicial foreclosure. If it’s judicial, it takes longer because of the court system. You can delay the process by filing for bankruptcy or government assistance. Once someone buys your house from a sheriffs’ sale or the bank repossesses it, you have 30 days to vacate the premises. 

The Rundown

A lot of information was given here in this short article so let’s do a quick review of everything. 

No one wants to miss any type of bill payment, but if you do, the best thing is to pay it as soon as you can. Don’t procrastinate as things only pile up and get worse the longer you wait.

If you only miss one payment or even two, late fees won’t be too bad, however it’s better to never be late in the first place. 

Don’t forget to communicate with whoever handles the payments for the bills you are late on and be sure to look into relief programs if things get too out of hand!