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Many individuals have the habit of skipping their payments. It usually happens that we forget to pay our bills on time. We assume that there will not be any effect of it on the CIBIL Score, but this is not true. The fact is that if you have skipped even one payment, your CIBIL Score can come down. This will have a negative impact on your creditworthiness. It may also happen that your loan application will be rejected; your credit card spending limit will be reduced.
In general perspective, the more time you take to repay your debts, the more it affects your credit score in a negative manner. If it has been observed by a credit bureau that you have skipped one of your payments, this record of skipped payment will be mentioned on your credit report for a period of 7 years.
The following are the effects upon CIBIL Score if you have been skipping your payments.
1. You will be tagged as a risky borrower: If you have skipped your payments, it will have a lot of effect on your CIBIL Score. In such a scenario, you will be tagged as a borrower who is risky to lend money.
2. Penalty Fees to Be Paid: If you are one among those who has skipped making a bill payment, you will have to pay penalty fees for skipping the payments.
Best Way to Get a Good Credit Score
By availing the services of a good credit advisory firm like Creditseva, you can easily keep a track of all your payments, get reminders for making the payments on time, monitor the reasons that cause a reduction in your credit score and also work upon them so that they do not impact your credit score in a negative way.
Steps to Be Taken to Avoid Skipping Payments
1. Set Reminders: You can provide the lenders with your email id and contact details and ask them to remind you to make the payments on time. This will help you save on the penalty charges if you have the intention of not belonging to the category of individuals who have skipped payments.
2. Regular Checking of Account Statement: Whenever you get a reminder from your lender, you need to ensure that you have the funds that are required to make the payment. You can do this by verifying your account balance before the arrival of the due date of payment.
3. Provide ECS as against writing PDCs (Post-dated cheques): It is better that you provide the lender with an ECS against writing PDCs. This will help you in taking the precautions for not skipping a payment. In this way, there will not be any negative effect on your credit score.
4. Choose Your EMI Date Accordingly: If you choose your EMI date according to the availability of funds, you will be successful in not skipping any of your payments. The most appropriate date of EMI that you should be selecting is when you have the confidence that during that period you will not fail to make the payment.
5. Opt for E-Statements: If you opt for E-statements, you can access them anywhere at any point of time without having any boundaries or limitations. This will help in calculating your inflows and outflows.
6. Use Technology: You can make optimum use of technology for helping you in not skipping any of your payments. This usage will help you in maintaining your credit score.
Some Examples to Enhance Your Understanding
Here we have some examples that would help you in understanding the effects of skipping payments on CIBIL Score. Having a look at them will give you a clear picture
1. What will be the affect on my credit score if I have of skipped one of my payment by 6 days?
If you have skipped your payments for the first time, it will be overlooked. But you need to be alert in such a way that it does not repeat again. If this is repeated once again, there will be a negative impact on your credit score.
2. What will be the affect on my credit score if I skip a payment for one month?
If you have skipped any of your payments, your credit score will come down and this will lead to a situation where you will face difficulty in obtaining new loans in future. In such a scenario, you will experience a decrease in your credit score and this will cause a problem in availing loans in future.
3. Ways to Repair Your Credit Score after Skipped Payments
These are the ways that will help you in repairing your credit score after the decrease in the credit score by skipped payments. By following these ways, you will be able to repair your credit score.
- Make a Provision for Regular Payments: Primarily, you need to make sure that all your repayments are linked up to direct debits. The minimum fee of repayment should also be included in this setup.
- Refrain from Making Cash Withdrawals from Credit Cards: Whenever you withdraw cash using your credit card, it will cause you double the money that you would have spent in any other withdrawal. This withdrawal also portrays that you have a poor sense of managing your money and thus your credit score will be reduced.
- Balance Your Credit Card Activities: You need to maintain a proper balance in using all your credit cards. This step will help you in maintaining a good credit score. The best thing to do is use your card for some payment and then repay this completely before the arrival of the due date. In this manner, you will remain in the good books of your lender.
By taking few steps which are recommended and avoiding few steps which are mentioned above, will help you in maintaining a good CIBIL Score. This way you can avoid skipping any of your payments and also avoid the lowering of your credit score. Creditseva will help you in setting reminders so that you can make all your payments on time and do not skip any of those, because we are here to guide, help and support you in your journey of credit.
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