People always get scared when they realize they take a loan stressed about payments. It will become even stressful when you forget to pay the monthly dues or come to realize that you won’t be in a financial situation to pay the debts due to some emergency. Then this article is for you giving you information about how it will affect your credit score.

What is a credit score?

Consider this – remember those report cards we got in school, your credit report is exactly that but instead of it containing your exam results it will contain all your financial history. Credit score is that score you used to get based on your subject marks only here it is based on the loans you took and how regular you were in paying it back.

Why is this credit score so important?
Just like how if you get good marks in school lead to you getting good colleges, having a good credit score helps you get very good offers on your loans. In short, your credit score determines your interest rate, tenure and loan amount sanctioned.

Now that we have a grip on the basics of credit score let us see how it is affected by late payments.

What will happen if you pay your dues late?

Usually any of the three things will happen when you miss on paying your dues on the lender side.

  • Late fees – a penalty will be levied by the lender at the time of payment.

  • A higher interest rate – The lender might increase the interest rate for the rest of the tenure

  • A negative mark on your credit report – Biggest and meanest of the problems, reporting a bad mark on your credit report

As you can see your credit score is affected only after the lender (bank or NBFC) reports you to the credit bureau.

How will your credit score be affected by late payments?

Well here is a secret that many don’t tell you – your credit score doesn’t tank that much if you don’t pay within 30 or 60 days. The serious issue occurs when you continue to not pay after 90 days where the bank or NBFC might “write off” the loan.

Once a “written off” comes on your credit report it will become extremely difficult to get another loan. Even if you do the loan will be of high interest rate and for a lesser loan amount.

How do I stay out of these late payments?

Your due date must be a date you must never forget. These are some of the things that you can do to avoid late payments

Auto debit from account – Make the loan payments to be auto debited from your bank account. This way you will never forget to pay your loans

Spread credit – Spread your spending across multiple credit cards where you can manage spends by having credit cards with different due dates

Convert dues to EMI – If you think you cannot pay your credit card bills before your due date convert them into EMI which you can pay off over a period of time


Even though you now know that you have some grace period of 30 days, it is still best to pay of your dues on time. This grace period can only be helpful once or twice, if you default multiple times then you will be put under risky borrower, which will make getting a loan next to impossible. So, in short “Be on time to have a happy and stress-free life”.