Your credit score is determined by a number of factors – the most important of which is your payment activity. Consumers must make sure that they are paying their bills on time and with the minimum amount of money listed on the bill. Skipping a loan payment could seriously damage your score, as it leaves your account in a state of delinquency.
Those who are suffering the effects of a bad credit history may want to look into refinancing their car loans. Essentially, this is a discussion with your creditor to renew the terms of a loan. Borrowers can work with the lender to arrange a smaller monthly payment over a longer period of time than originally agreed upon. This way, the consumer will be able to afford the installment bill and will not have to skip any payments.
Once your account is no longer considered delinquent, your credit score will begin to restore itself the longer you are able to make your payments in a timely manner. This could save the borrower a significant amount of money in late fees and other charges associated with the account.