In this era of digital banking, your credit score has become a crucial factor, making it difficult to perform any financial task. Whether it’s getting a loan approved, getting a new credit card, or availing a special benefit from your bank, your score proves your reliability. This is why people are vigilant about their monthly due dates to avoid missing payments.
Does a day’s delay in payment really impact your credit score?
Many people wonder if a credit card payment is delayed by a day or if a loan installment is delayed by a day. This question is common because late payments can harm your credit score. However, the reassuring thing is that most banks and credit bureaus in India do not consider delays of less than 30 days as late payments.
How Does a Bank’s Grace Period Help?
Often, banks or card issuers offer a short grace period, ranging from a few hours to a day. If your due date was Monday and you made the payment on Tuesday, it’s generally not considered late. However, this depends entirely on the bank’s internal policy, so it’s important to know your bank’s rules regarding due dates and grace periods.
Why a one-day delay doesn’t impact your score
Only payment delays that are pending for 30 days or more are reflected in your credit report. This means that if a payment is delayed by just 24 hours, it doesn’t directly impact your score. No record of this delay is added to the report.
Late Fees May Apply
While this doesn’t impact your score, banks may charge late fees for even a single day’s delay. These fees aren’t usually significant, but if they occur repeatedly, they can accumulate into a significant expense and raise questions about your financial habits.
When Does a Credit Score Decline
Credit scores deteriorate when payments remain pending for 30 days or more. If the delay reaches 60 or 90 days, it’s considered a serious default and can result in a significant drop in your score. This can lead to difficulties in future loan approvals or card limit increases.
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Easy way to avoid delays
If you have trouble remembering due dates, you can set up auto-debit or standing instructions on your bank account. This feature automatically makes payments on the due date, virtually eliminating the possibility of delays due to mistakes.