Dear Prism experts,
Are late bill payments bad for you?
Answer:
The consequences of the late bill payment will vary greatly depending on the biller. You will want to read the small print on your bill or call up your biller to get the exact answer. However, generally speaking, you need to keep the following in mind:
Grace Period
A grace period is the amount of time past the deadline during which the payment will not be considered late. Typically, credit cards and loans have no grace period at all. Most other billers usually have 2-4 days grace window. When it comes to utilities, they, typically, will give a generous few weeks.
Late Payment Penalty
Late payment penalties get assessed when you pay late (and outside the grace window). It is either a one-time fee or is an interest that gets assessed on your unpaid balance. Usually, the late payment penalties on rent are the steepest (e.g. $100 - $150 fee), while others billers are around $20-$30. Utility bills are normally the least strict, as they typically assess a 1-2% monthly interest.
32 Day Rule
If your bill is more than a month late, there is a good chance that the biller will report it to the credit bureau, which will hurt your credit score. Don't just let it happen! Take initiative - call up your biller and work out a repayment plan that works for you!
See also: How Much Will One Late Payment Hurt Your Credit Scores?
Basically,
Most billers have grace periods of a few days. If you pay outside of the grace window, you'll have to pay late payment fees. If you pay more than a month late, it will likely affect your credit score.
