If you have ever taken a loan or used a credit card, then you must have heard the name of "credit score". It is a three-digit number that tells how responsibly you handle your money. When you pay EMI or pay bills on time, then this score remains good. But if you are unable to pay the EMI of any month on time, that is, if you make a mistake once, then this score can fall. Now the question arises, does a mistake of just one time really make so much difference? Let us understand how much impact there can be on the credit score if you miss an EMI once, and why this small mistake can become a big problem.

The loss depends on how much delay there is
If your EMI is delayed by 1 to 7 days, then usually the banks ignore it. In such cases, there is no significant impact on the score. But if the delay is 30 days, then the matter becomes serious. This gets recorded in the report, and your score can fall by 50 to 100 points. If the delay reaches 60 to 90 days, then banks and credit bureaus consider it a serious default. The score goes down rapidly, and it may be difficult to take a loan next time.

And if it exceeds 90 days, then banks can declare your loan account as NPA, i.e., Non-Performing Asset. This means that now you are no longer a reliable borrower. In such a situation, not only does the score fall, but any bank can refuse to give a loan in the future.

EMI default has a direct impact on your record

The biggest part of the credit score depends on your payment history. This simply means whether you have paid EMIs and bills on time till now or not. If your history has been good, then one delay will not cause much harm. But if your record is already weak, then one more default can bring down the score directly. For example, if you delay your payment for the first time by 30 days, then your score can drop by 100 points. And if you repeat the mistake again and again, then it can drop by 150 to 200 points. In many cases, people's score drops from 750 to 600 or even below. It becomes very difficult to get a loan once you reach this level, no matter how good your salary is.

It takes a long time to improve your score.
If you have made a mistake, do not be disappointed, because your credit score does not get spoiled forever. As soon as you start paying EMIs and bills on time again, the score starts rising slowly. Generally, after 3 to 6 months of continuous payment on time, the difference starts showing. If you have not been able to pay the EMI for any month, then the best way is to talk to the bank. You can reschedule the loan installments or take the option of a moratorium for some time. Along with this, keep in mind that you pay the entire credit card bill on time. Do not try to escape by making the minimum payment; otherwise both the interest and the score will be affected.

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