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Bill stress? Expert reveals secret number of days Aussies can pay late without credit score penalty

Australians struggling to pay their bills in the cost-of-living crisis can take advantage of 'lee-way' days before their credit score is impacted.

Do you have a bill or three affixed to the fridge that give you anxiety every time you catch sight of them? Well, you need to know “due dates” can be taken as mere suggestions.

Not many people realise it’s possible to miss every bill in your life by a certain, secret number of days, without hurting your credit score. And without upsetting your supplier (well, not too much anyway).

Here’s how late you can be with which bills – with no worries.

If your repayments are piling up, it could be worth checking which you can push back without hurting your credit score.
If your repayments are piling up, it could be worth checking which you can push back without hurting your credit score. (Getty/Nicole Pederson-McKinnon)

Under our relatively new comprehensive credit reporting system, more information is captured on your credit report – and feeds into your all-important credit score (remember, this can make or break any future money move you want to make).

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For credit products, this information includes whether your repayment is late by more than 14 days.

This relates to repayments for banks, building societies, credit unions, credit card companies, and some payday lenders. (There is a big up-to-90-day opportunity too – but I will get to that shortly.)

Now, this information stays on your credit file and is reflected in your credit score for a rolling two years. As each subsequent month is added, a repayment from two years ago drops off.

NOTE: Only credit providers can record this repayment information about you. And, only other credit providers can view the repayment part of your credit file.

Non-credit providers – like a teclo or utility company - will only see a stripped-down version of your file and score.

You can pay your utility and phone bills even later. You will get filthy emails or letters, but you have a full 60 days before you need to worry about them reporting you to a credit bureau.

That’s because, after this amount of time, you are considered in default.

This is far more damaging to your credit score than being (more than 14 days) late with a credit repayment or two, and will impact it significantly.

Be warned, a default for a bill over $150 stays on your credit history for five years, even after you pay it.

By this point you should be screaming: but what about late payment fees and penalties?

If you will incur them, do your darndest to pay on time… paying extra will just drive your finances further backwards.

Credit card companies, in particular, may well penalise you, as might telcos.

But lenders may not and neither usually do insurance companies. Refer to the fineprint of each of your contracts and pay the bills where it will hurt you if you don’t, first.

Check also whether you receive a pay-on-time discount for any products or services – this won’t apply to your credit products but energy companies are especially big on this.

Again, prioritise making payments to companies where delay-paying will cost you more.

In all this, you may well have wondered what happens if you ask for financial hardship concessions?

Firstly, if you need them because you will struggle to meet even the ‘real’ payment deadlines above, then you will more than likely be granted them.

By law, the companies in your financial life must help in some way if you ask.

So don’t be scared to – and do this before you put your credit score in danger by missing bills by more than the ‘lee-way’ days you now know.

The good news is that once you enter a financial hardship arrangement with a company, they are not allowed to put you into default or record a payment as late… even if you make none under the terms of that arrangement.

But here’s the downside: the words “financial hardship” will appear on your credit report for a full 12 months.

This will act as a red flag to new providers, whether for a loan for a home or a mobile phone.

But then, that year could also be the time you need to build up your income and rejig your expenses to get back on track.

Finally, know that some lenders will take a dim view if you get 90 days or more behind on your home loan repayments and start asking a lot of questions about your longer-term solvency (this is still the case if it is under an agreed arrangement).

It is best to stay this side of that administratively, as well as financially, challenging situation.

If you do a deal, consider making it for just 89 days, just to give yourself that bit of breathing space.

If you're feeling overwhelmed and need help dealing with financial stress, you can contact free advice and counselling from the National Debt Helpline. You can call 1800 007 007 between 9.30am and 4.30pm Monday to Friday, or reach out to Mob Strong Debt Help on 1800 808 488.