As the economy finds itself moving towards a potential recession, more and more Americans are finding it difficult to keep up with payments.
According to NerdWallet, 37% of Americans incurred late fees on their bills in the past year. The most common fees paid for were credit card late fees (21%), followed by late fees on utility bills (10%), and rent (8%).
Late fees can have a dramatic effect on your credit report. The good news is that as long as you don’t pay more than 30 days late, your credit score should remain intact. However, experts say that if you fall behind payments for multiple months, that’s when your credit score tanks and takes a hit.
Falling behind payments on credit cards is one thing, but if you fall behind on utilities, this means that you could end up losing access to electricity, water, gas, and/or internet. In worse cases, you might even have your care repossessed.
Experts advise those who are falling behind on payments to speak to their creditors immediately and ask what options are available to them. The further behind you fall on your payments, the narrower your path towards payment gets. But, if you communicate your issues with your creditor as early as possible, they might be more flexible.
The best case scenario is that they’ll extend your payment schedule so you don’t incur a late fee and don’t fall behind on your payments further.