A delinquency involves failing to fulfill a financial obligation as agreed. Therefore, creditors and lenders can consider payments delinquent as soon as customers violate their contracts or payment arrangements. Still, some lenders allow borrowers to pay their bills later than the due date, and most creditors and lenders don't immediately report late payments to credit bureaus.
Credit Reporting
Credit card companies generally consider a payment delinquent anytime cardholders miss making a required minimum payment on the due date. However, that doesn't mean a delinquent payment will appear on your credit report. Credit card issuers usually don't report late payments to credit bureaus unless they're at least 30 days past due. Therefore, cardholders who make a payment before 30 days have passed typically pay late fees to card issuers without the additional penalty of having the late payment appear on their credit reports.
Repossessions
Auto lenders in many states can repossess vehicles as soon as people default on their loans or leases. Auto company contracts outline what causes a delinquency, but the U.S. Federal Trade Commission indicates that a consumer's failure to make a loan or lease payment on time usually amounts to a delinquency. However, the FTC recommends contacting your auto lender as soon as it's apparent your payment is going to be late. Some companies will work out a payment arrangement if a customer has the ability to pay past due amounts in the immediate future.
Grace Periods
People who have mortgages often have grace periods in which they can pay their monthly mortgage bill as much as two weeks after the due date without paying a late fee. Mortgage lenders usually don't report homeowners' late payments to credit bureaus unless they're at least 30 days behind on payments. However, a "Los Angeles Times" article by Liz Weston notes that lenders may contact homeowners who haven't made their payments by the due date even if the grace period hasn't passed. In such cases, Weston notes that the lender may know a homeowner's financial situation has changed for the worse, and the lender is concerned the homeowner will fall further behind on payments.
Considerations
Watch out for fees even if your lender allows a grace period on monthly payments because the payment terms could change. For example, a 2011 MSNBC article indicates that Bank of America changed the terms of its grace period for some of its mortgage customers who pay their mortgages through an account from another bank. According to the article, customers could be charged a $6 fee if the funds paid through another bank arrive during the last six days of the 15-day grace period. However, consumers who make mortgage payments from Bank of America accounts don't pay the fee.
0 comments:
Post a Comment