If you’ve missed a payment on a credit card or loan with a UPI wallet, your credit score is likely to take a hit. In this blog post, we’ll explain exactly how a missed payment affects your credit score, as well as some tips on improving your score if it’s been damaged.
Missed payments can majorly impact your credit score and UPI banking, and it’s not something to be taken lightly. If you’re thinking about missing a payment, we urge you to reconsider, and it’s just not worth the risk.
What Is a Credit score? How do missed payments impact it?
A credit score is a numerical expression used to quantify a person’s creditworthiness, and it is based on a level examination of their credit files. The main component of a credit score is credit report data, normally obtained from credit agencies.
There are many different types of credit scores. FICO® Scores and scores by VantageScore are two of the most popular credit scores, but industry-specific scores also exist.
Your missed payment history is one of the biggest factors that can affect your credit score.
A single late payment can drop your score by as much as 100 points, be it due to a technical issue with the UPI payment gateway or other problems. You may also be charged a late fee, which will be reflected in your credit report.
Missing a payment is not only expensive, but it can also have a lasting impact on your ability to get future financing. In addition to late fees, you may be charged higher interest rates on future loans and credit cards.
If you have missed a payment, it’s important to take action immediately to mitigate the damage to your credit score. You can do this by making a full payment as soon as possible and contacting your creditors to explain the situation.
While the impact of a missed payment on your credit score can be significant, it is typically not permanent. With time, as you continue to make timely payments, your score will slowly recover.
How to maintain a good credit score?
Maintaining a good credit score is important for your financial health. A good credit score in a UPI app can help you secure a loan, get a lower interest rate, and rent an apartment.
However, if you miss a payment, your credit score will drop. The impact of missed payments on your credit score depends on several factors, including how late the price is and how often you miss payments. If there’s a technical issue with paying the amount, you can ask the lender to share their UPI QR code which might help.
If you have a history of missing payments, your credit score will suffer more than if you have never missed a payment. The same is true if you frequently miss payments.
If you miss a payment by 30 days or more, it will significantly impact your credit score. One late price can drop your credit score by 100 points or more. And the longer you wait to make the payment, the worse it will be for your credit score.
If you have missed a payment, there are some things you can do to minimize the damage to your credit score:
- Make the payment as soon as possible.
- Contact the creditor to explain the situation and ask for leniency.
- Make sure you get all the fees.
Missing a payment can be costly, both in terms of your credit score and financial health. Take steps to avoid missing payments, and if you do miss one, take steps to mitigate the damage.
