The consequences of missing different monthly payments
All your bills are flowing in and you are wondering if you are going to be able to afford them. You might be thinking of skipping a payment or two, but which ones? Skipping a monthly payment has consequences, but each one is unique. Missing a cell phone bill is much different from missing a mortgage payment.
So, what do you do in this situation? Before you decide what bill to put off until next month, consider what could happen.
If you skip a mortgage payment, the foreclosure process will likely begin. Many lenders will begin the process immediately, while others will give you a 90-day grace period. Even if your lender gives you 90 days, it will still show up on your credit report and impact your credit score. And remember, next month you will need to double up on mortgage payments and any late fees to catch up.
Credit card payment
If your credit card payment is 30 days late, it will impact your credit score. Lenders report late payments to credit bureaus and charge you late fees. Sometimes you might not be able to use rewards until you get caught up on payments. If you miss multiple payments, you may experience an interest rate increase.
Car loan payment
Credit bureaus receive late auto loan payment reports after the payment is more than 30 days late. This has similar consequences to missing a credit card bill. You will receive a late fee charge, face a credit score reduction and potentially see your interest rate increase. While you may not face immediate risk of repossession after one missed payment, it becomes a possibility.
As you can tell, missing any of these payments can have serious consequences on your credit score and even the future of your property. Read more about the impact of missing monthly payments at the IRS website.