22-Nov-2017 written by : FSI-Team
So, you had a rough month and couldn't catch a breath. Now that things are in control, you reflect on the events that took place in the recent past and realize you forgot to pay your credit card bill. Now, apart from the thought of paying a fine, another thing that's likely to cross your mind is:
We all know that for a healthy credit report, you must always pay your bills on time. However, can a single missed payment can do damage just as well? The truth is- it could go either way.
It's possible that your lender doesn't report the late payment at all. Besides, most banks and other financial institutions only report missed payments when they are delayed by more than 30 days. So, if you are able to pay for the EMI or the pending credit card bill within 30 days of their due date, you should be good.
Another possibility that's in favour of you is that the top banks use advanced analytic models that learn about your credit profile through the history of your payments. So, if you have been paying the bills on time on a consistent basis in the past, it's possible that their system will automatically ignore the instance of one late payment.
If luck didn't favour you and your lender did report the late payment, then your CIBIL score may take a hit. However, its intensity will depend on the following factors:
DPD or Days Past Due: This is a term used for the number of days that have gone by since the actual payment date. Usually, lenders use four kinds of categories- 090, 060, 030, and 000. In this, the first represents that the payment was late by 90 days. Similarly, the last one represents that the payment was made on the due date itself. You will usually find DPD info in most of your credit reports.
Recency of Previous Late Payment: How recent was your last late payment also plays a big role in the damage to your credit report. For example, if an instance of a single late payment occurred 4 years ago and since then you have been paying your bills on time every time, a late payment now won't do much of a damage. However, if the same had occurred only a few months back, then it can make your score lose as many as 100 points. So, there is a good chance that you end up finding a personal loan for CIBIL defaulters.
Late Payments on Other Accounts: If it's just one account that has a history of a few late payments, then the damage would be limited. However, if there is another account or two in your credit report that shows a history of late payments, then the same can be quite high.
Whether you get lucky or not, late payments in your CIBIL report never look good. So, it's best to have them removed.
The first thing to do when you have missed a payment is to get a copy of your CIBIL report. You need to make sure that the lender has reported the same to the credit agency. If they have not, then it won't be mentioned in your credit report, which means you don't have to worry about it.
If after reading your credit report you find out that there is a mention of a late payment, then you can request your lender to strike off the same on a goodwill basis, which is commonly known as "goodwill adjustment".
If you have been a responsible customer and have always paid your bills on time in the past, then the lender may approve your request and delete the information from their records. They will send the updated information to the credit agency as well, which in turn will update your credit report accordingly.
You can check your credit report again after a month to make sure that the instance of late payment has been deleted.
If for some reason, your lender is unwilling to update their records, then you may have no other option but to stick with what you have got. However, you can still make up for the loss by developing healthy credit habits and ensuring timely payments in the future.