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An increasing percentage of people are expecting to miss loan payments, according to a July survey of Consumer Expectations by the Federal Reserve Bank of New York.

The survey data show people expecting to miss a payment on their debts has steadily increased since March, when 11.45% of those surveyed said they expected to miss a payment within the next three months. The percentage increased to 12.39% in April, 13.26% in June and 14.06% in July. It is now at its highest level since September 2014.

“The uptick was most pronounced for household heads below the age of 40 (for whom the average likelihood rose from 16.6% in June to 20.9%) and those with a high school degree or less,” according to a press release by the Federal Reserve.

The data was collected by interviewing about 1,200 heads of households across the United States.

The Trouble With Missed Payments

Remember, missing loan payments can cause you to incur late fees or penalty interest rates. You can also damage your credit scores, as your record of paying or not paying your bills on time is a major factor among most credit scoring models.

When you miss a payment, your lenders report it to the three main credit agencies: Equifax, TransUnion and Experian. It will than appear on your credit report(s), which contain details about all of your financing, including student loans, mortgages, bank and retail store credit cards and auto loans. This information is used to determine your credit scores.

A single late loan payment, for, say, a credit card or student loan, can damage your credit score up to 100 points. And once you miss it, there is not much you can do to repair it, except wait for time to erase it. Negative information generally takes 7 years to age off of your credit report completely (bankruptcies can take up to 10), though effects on your score will lessen over time. You can go here to learn how long specific items stay on your credit report.

Avoiding a Credit Dent

If you expect to miss a payment, before you skip it, call your lender to see if you can modify your loan. Options will vary depending on the type of financing, but if you have strong credit, you might be able to refinance your loan and/or lower your payments.

If you do miss a payment, you may want to call your issuer up, too, to see if they’ll refrain from reporting it to the credit bureaus. They may be willing to do so if you have a previously good track record.

You can see how late payments may be affecting your credit by viewing your free credit report card, updated every 14 days, on Credit.com.

Image: Portra

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