Report: 37% of Americans paid late fees in the past 12 months

Many consumers are finding it difficult to keep up with paying their bills.

At that point, 37% of Americans had received a late fee on a bill in the past 12 months, according to a new NerdWallet report.

The most common was late fees on credit cards, with 21% of respondents having paid late fees at least once, followed by 10% who had paid late fees on utility bills and 8% who had paid late fees on rent. NerdWallet conducted the survey of 2,061 U.S. adults in early April.

“Late fees are just one consequence of paying late,” says Sarah Lassner, travel and credit card expert at NerdWallet.

More information on personal finance:
You may get a tax break if you employ your child this summer
When paying by cash is better than paying by credit card
Why are groceries so expensive, and how can consumers feel more at ease?

Matt Schultz, chief credit analyst at LendingTree, said late fees are assessed as soon as you make a credit card or loan payment past due, but they typically don’t appear as a blemish on your credit report until you’re 30 days late.

Experts say the consequences become more serious if you’re more than 30 days late. Late payments can have more serious consequences, like having utility services cut off. They can also have more immediate repercussions, like having your car repossessed.

“If you know you’re going through tough economic times, it’s definitely better to tackle it head on rather than waiting,” Schultz said.

We explain how to limit the impact of late fees and work with creditors if certain life events, such as layoffs or financial hardships, affect your ability to pay.

If you’re starting to fall behind on your regular monthly payments or expect to fall behind, it’s best to “speak to your creditors directly before you run into trouble,” said Greg McBride, chief financial analyst at Bankrate.com.

“That’s when you have the most options. The longer you delay, the fewer options you have,” he said.

It helps to communicate the problem as early as possible: If your bill is due at the end of the month, don’t wait until the day before to contact the servicing company, says LendingTree’s Schultz.

Communicating well in advance gives you more flexibility to explain the situation and negotiate a solution, he said.

“If we can confront these situations and offer solutions, it makes the conversation go a lot smoother,” Schultz said.

In his book, “Ask, Save, Earn: How to Take Control of Your Financial Life,” Schultz writes that cardholders can ask their card issuers to waive late fees the first time they make a payment late.

But keep in mind that “the more often this happens, the less likely a lender is to offer a waiver,” McBride said.

If you’ve been late with a payment once and financial issues mean you’re likely to be late again soon, let your lender know, Schultz said.

“Going to your lender every two months and saying, ‘I’m late on this, can you forgive me?’ is very different from saying, ‘I’m late because I had a medical emergency or I lost my job,'” he said.

If you find yourself struggling to make payments because of an unexpected event, like being laid off, most lenders offer hardship programs that temporarily lower interest rates or waive fees, Schultz writes in his book.

While details vary, “the important thing is to participate in these opportunities” which are “designed to help you get back on your feet,” McBride explained.

“Running away from the problem and falling further and further behind only narrows your options further,” he said.

Just one late payment can have a big impact on your credit score — it could drop your score by up to 100 points, depending on other elements of your credit history.

Experts say that if it was a one-time mistake, you can contact your lender and ask them to remove the late fee from your credit report. While it’s possible under certain circumstances, lenders generally don’t like this tactic because it makes your data unreliable for future credit transactions.

“Your credit report is just a bunch of data points that tell you how well you’re paying your debts,” Schultz said. When lenders start to “cherry-pick” what’s on your report, the data becomes unreliable and less useful in their decisions.

“The primary customer of credit reports is not consumers, it’s businesses,” Schultz said, because credit reports are designed to help businesses make lending decisions.

Although rare, if you have unusual circumstances and you otherwise have a “clean history,” you can go to your lender and explain what happened. For example, if a payment was late because of a natural disaster, it never hurts to ask.

“Weird situations happen to everyone in life,” he said.