Only 70% of Americans Say They're Paying Bills on Time This Year. Here Are 2 Consequences of Being Late

It's really not a good situation to put yourself in.

Many of us have been late with a bill or two in the past. Maybe you forgot to pay the electricity bill and got a notice from the power company. Or maybe you had a month loaded with unplanned expenses, and as such, you failed to pay your credit card bill on time.

It's one thing to be late with a bill as a one-off thing. But it's another to make late payments a habit. 

In a recent report by the Financial Health Network, only 70% of people said they're paying all of their bills on time this year. If you're in the 30% of people who aren't being timely, you should know that these consequences might ensue.

1. Your credit score could take a dive

Your payment history carries more weight than any other factor when calculating your credit score. If you're late with bills, it could send your score on a downward spiral. And that could make it difficult, if not impossible, to borrow money when you need to.

Poor credit could also make borrowing a lot more expensive. Let's say you need to take out a personal loan. With poor credit, you might get stuck with a really high borrowing rate, making that loan unaffordable. 

2. You might lose the asset you're trying to pay off

Being late with certain bills could eventually lead you to lose the assets you're trying to pay off. Let's say you fail to make a car or mortgage payment for several months in a row. That could lead to your vehicle being repossessed or your mortgage lender pursuing a foreclosure.  

How to get back on track

If you've been late with bills more often than you'd like to admit this year, perhaps your budget needs a redo -- or you need to start following a budget in the first place. The reality is that inflation is making it very difficult for people to manage their expenses, so even if you're limiting your spending to essentials only, you might still end up falling behind on bills. But if you rework your budget or set one up to stick to, you may have an easier time allocating your limited resources to your most essential expenses. 

Meanwhile, if you've been late with debt payments, it could pay to see if there's a way to make them more affordable. Right now is unfortunately not a great time to refinance a mortgage or auto loan. But if you owe money on credit cards, you can look at doing a balance transfer to potentially lower the interest rate on your debt. That could result in lower minimum payments -- and reduce your chances of being late with them. 

Being late with bills could have negative consequences you'd probably rather avoid. If you've been late a lot this year, do what you can to kick that habit by the time 2023 comes along. Otherwise, you could end up setting yourself up for a world of financial upheaval in the new year.