Late payments on your credit card can be a very scary thing. This article contains information about what will happen to us after a credit card payment is overdue, how to check the delinquency record, and the delinquency record after paying the credit card payment in full. The first thing to conclude is that credit card delinquency is something that must be avoided. Please continue reading for more details.
What if my credit card is delinquent?
If your credit card is overdue, it will be recorded as overdue.
01. What if my credit card is overdue?
It is said that delinquent credit card payments will not immediately lower your credit score. If your credit card payment is overdue, you will be penalized. When will you begin to be penalized?
If your credit card is overdue
1 to 4 days
A brief notification and guidance will be sent one to four days after the overdue payment. It’s something like, ‘I’ll contact you after the credit card payment due date’.
You will not be left with a delinquency record or penalized for up to 4 days. However, overdue interest will accrue. The longer the period of overdue payment, the more interest is added each day, so it is best not to make the payment even for a single day.
Day 5
From the 5th day onwards, overdue payment information will be recorded and your overdue payment information will be shared with credit card companies.
From this point on, you will suffer three disadvantages.
first. Your delinquency history will be shared with other card companies and entered into the joint forecasting network, so you will no longer be able to use your credit card.
second. A dunning phone call is initiated instead of a casual text message.
third. Your credit score will also drop sharply, making it difficult to use things like bank loans.
Day 20
From now on, delinquent information will be transferred to the credit card company’s credit department.
Moving to a dedicated credit department means that a department has been created to collect my overdue credit card payments in earnest. Not only do messages and phone reminders increase in intensity, but debt collection officers sometimes visit in person. In severe cases, you may even be subject to legal action through the court.
90 days
After 90 days or 3 months, you become a credit defaulter.
Now, you will be entered as a credit defaulter and will not be able to engage in any financial transactions. Credit card companies take measures to seize wages, bank accounts, property, etc. Even if you pay off the entire card after this, a delinquency record will remain with the credit card company for up to 3 to 5 years. Your credit score will continue to drop, making it difficult to raise it back to normal.
02. What if I pay the credit card bill in full after delinquent payment?
It won’t be a big problem until the 4th day, which is the limit where you won’t be penalized, but even if you pay your credit card bill in full, your delinquency record will remain for up to 5 years.
If your credit card is overdue
Additionally, as your credit score drops, you are subject to higher loan interest rates and lower loan limits during financial transactions.
If you fall behind on your payments, life can continue to be difficult. I can’t get a loan or use a credit card. Therefore, it is most important to be careful to avoid delinquency as much as possible.
03. Check delinquent records
They said that a record of delinquent payments will remain, and we can check these records as well. If you fail to pay not only credit card bills, but also cell phone bills and taxes, a delinquency record will remain. Although full payment has been made and the delinquency information has been released, the record will remain for 1 to up to 5 years depending on the period of delinquency.
It is also said that credit score recovery can take as little as 3 months to as long as 3 years.
Delinquency records can be checked at the Credit Information Service. You can find loan information, card issuance history, etc., including short-term and long-term delinquency records.
04. Standards for registering delinquent records
The impact on your credit score varies depending on the amount of delinquency, number of delinquencies, and period of delinquency. These delinquent records will remain for 1 to 5 years from the date the delinquent information was released. The record begins after you pay the loan, not while it is in arrears.
Overdue amount, number of days overdue, number of overdue payments, impact on credit score, sharing of overdue records
Less than 100,000 won
1 case over 100,000 won or over 5 days
sharing financial sector
2 cases of credit score decline recorded for 3 years after repayment
1 case over 300,000 won for more than 30 days Credit score decrease recorded for 1 year after repayment
1 case over 1 million won for more than 90 days Credit score decline recorded for 5 years after repayment
*If taxes such as local taxes, fines, etc. are overdue by more than 5 million won or more than 3 times a year, your credit score will drop regardless of the number of days overdue. Records remain for 5 years even after repayment.
Reckless use of credit cards should be avoided, and late payment is something that should not be done. Since interest is charged daily, you may be able to overlook it as not much, but if you ignore it, you will end up with debt. One day, I wake up and realize that I may be a credit delinquent. You must be careful. I am also trying not to use credit cards indiscriminately, but I know that there is nothing I can do if I run out of cash. If indiscriminate spending is a habit, you first need to make an effort to live only with the amount of cash you have. Only then can you survive the swamp of delinquency and danger.