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A delinquent payment is a payment that is not made by the specified due date, also known as a late payment. A payment that is even just one day late can be considered a delinquent payment, and can incur some hefty fees and interest charges depending on the type of account it is associated with. It can also show up as a blemish on a credit report, which can lower an individual's credit score and make it less likely that he or she will be approved for loans or credit in the future.
Many firms have different degrees of delinquent payment. A payment that is one to thirty days late, for example, may simply incur late payment fees and additional interest charges. A payment that is more than thirty days late, up to 60 or 90 days late, may be reported to credit agencies and sent to collections. The laws regarding this vary in different countries and states. For these reasons, it is important to understand the local laws and read the fine print in any credit agreements, which will specify the date that payment is due and the penalty if it is not received.
Most companies are free to charge late fees and additional interest payments after just one day of a delinquent payment. One way to avoid this is to set up automatic withdrawals from a checking account or automatic charges to a credit card in order to pay certain bills. This is a good idea for bills that remain the same each month. Otherwise, setting up reminders, such as emails or text messages, can be a very helpful way to remember to make a bill payment on time. If all else fails, many companies allow customers to make phone-in payments, which may incur an extra fee, but at least will ensure the bill is paid on time.
There are many reasons to avoid making a delinquent payment. Once a late payment is reported to the credit reporting agencies, it can stay on a credit report for years, and negatively impact a credit score. A low credit score and poor credit report can make it difficult to get loans or credit in the future, and can even make it harder to get a job or get approved for an apartment. If nothing else, making sure to pay the minimum payment on time will help keep accounts in good standing.
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