4 Myths About Late Payments
March 27, 2018
There was a time when late credit card payments and EMIs weren’t a big deal. This is because there was no structure or arrangement to record and keep these in check. However, today the banks have advanced tools and services to closely monitor the repayment activities of their customers, mainly through credit reports provided by agencies like CIBIL, High Mark, etc.
In that regard, the following are the top 4 myths that every responsible credit user should know about:
One Late Payment Doesn’t Make a Difference
It’s true that a single late payment isn’t usually something to worry about. However, in some cases, it can have a huge impact still.
For instance, if a late payment was made for the same account in the recent past, then the damage could be a lot. Similarly, if a late payment was made in a different account that belongs to the same person, they also it may cause some damage.
Once the Payment is Made, the Damage is Reversed
When a person has delayed a payment, the lender may report it to their credit rating agency, in which case the damage is already done. So, even if the person finally makes the payment, the score won’t improve automatically. To get the lost points back, they have to stick with a good repayment schedule and wait for a few months or so for credit recovery.
You Get a Grace Period of 30 Days
A lot of traditional banks don’t report late payments immediately after the deadline has passed. They may give you 2-4 weeks to make the payment eventually. However, that may not be the case with every lender.
Late Payments of Co-Borrowers Don’t Affect Your Credit Score
When you get a joint loan with someone, then you share the financial responsibility of the loan with them. So, if they are late with a payment, then your credit report can get affected just like theirs.