Americans are growing increasingly concerned about falling behind on their debt, with the New York Federal Reserve’s monthly Survey of Consumer Expectations revealing that the perceived probability of missing a minimum debt payment has risen to its highest level since April 2020.<\/p>\n
The central bank’s survey, which polled roughly 1,300 households in December, found that the increase was most pronounced among adults over the age of 60, those without a college degree, and those with annual household incomes below $50,000.<\/p>\n
According to Matt Schulz, chief consumer finance analyst at LendingTree, it’s an “uncertain time for many Americans,” with a growing share of adults nervous about their current jobs, worried about the prospect of finding their next one, and concerned about their ability to make minimum debt payments over the coming months.<\/p>\n
Research by LendingTree found that even a single missed payment can have lasting financial consequences, with the potential to ding a credit score by about 80 points on average, as discovered in an analysis of 100,000 credit reports in October.<\/p>\n
Consumers with a single missed payment average a credit score of 553, roughly 80 points lower than those with perfect payment histories, with credit scores typically ranging between 300 and 850.<\/p>\n
Ted Rossman, senior industry analyst at Bankrate, notes that the credit score implications worsen for borrowers with better scores, stating “the bigger they are, the harder they fall,” with the potential for a single 30-day delinquency to result in a loss of 100 points or more.<\/p>\n<\/p>\n
If you have a lower score, the impact of a missed payment would not be as significant, Rossman added, as borrowers in riskier credit tiers typically have a few dings on their credit, making the new one less impactful.<\/p>\n
If you are in jeopardy of missing a payment, Rossman advises asking the lender for a break, as many will work with you to pause payments or lower your interest rate, potentially avoiding credit score damage if you speak up early enough and get permission to pay less or maybe even nothing at all for the month.<\/p>\n