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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Debt Management and Loans

Which of the following is the usual effect on an individual's credit score of repeatedly missing due dates on credit card payments?

Repeated missed due dates lower the credit score. Payment history is a major factor in scoring, and delays are reported to credit bureaus. A weaker score can make future loans harder to get or more expensive, even if dues are paid later.

  1. AIt raises the score because usage is high
  2. BIt has no effect as long as the minimum amount is later paid
  3. CIt lowers the score because payment history is a key factorCorrect
  4. DIt affects only the card issuer's internal rating, not credit bureaus

Explanation

Payment history is one of the most important factors in a credit score. Late or missed payments are reported to credit bureaus and reduce the score, making future borrowing costlier or harder.

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