How long Does it Take for a Missed Payment to affect my Credit Score?
If a recent financial upset has made it necessary for you to stop paying a few bills, you’re not alone. Nearly ten percent of Americans are in danger of missing a loan or utility payment in the event that they had a major financial event such as having to take unpaid medical leave or a job loss.
If you’re struggling with just paying for the basics, then the last thing you need is collection calls about bills that you just don’t have the money to pay. Unfortunately, this seems to be the standard policy of a lot of companies as soon as a credit agency reports that you have missed a payment. Many people in this situation wonder how long they have before they need to start worrying about collection calls.
By law, a company has to give a customer at least 30 days before they report a missed payment to a credit bureau. However, many states have laws in place that give consumers an addition 30 days. Even if your state does not have this law, some companies are willing to delay reporting. Since making a report to a credit bureau can cost a company a nominal fee, they tend not to want to report right away unless there is some benefit to them. Of course, this benefit can be as simple as making it harder for the customer to refinance the debt by lowering their credit score, so it’s generally not a good idea to rely on this fact as the sole method of avoiding a low credit score.
If you truly can’t afford to make the minimum payments on your bills, then you might want to consider debt consolidation. This process will pay off all of your existing loans (including those that are in arrears), and replace them with a single loan. That loan will have a lower monthly payment, freeing up cash to pay other bills. Once you get back on your feet, you can choose to continue to make your minimum payments on your consolidation loan until the debt is paid off, or you can pay extra and get it paid off quickly.