More than half of all Americans reportedly live paycheck to paycheck. If you fall into that category, unexpected expenses and poor planning can make you fall behind on your bills. Things happen, and people encounter financial straits that make keeping up with bills challenging.

While paying a bill late doesn't seem like a big deal at first, it can negatively impact your finances moving forward. Here's how.

A Ding to Your Credit Score

If your payment becomes more than 30 days late, it can end up on your credit report. Your credit history plays a big part in your financial health. Financial institutes use it to determine interest rates, whether you're worthy of getting a line of credit, and more.

Preserving your credit score is paramount. Unfortunately, late payments can cause your score to dip. But that's not all. A single late payment can stay on your report for up to seven years! Using a bill tracking app can help you prevent a single late payment from marring an otherwise good score.

Late Fees Galore

Another issue you'll have to deal with is late fees. Many banks and creditors will charge exorbitant late fees that show up on your next bill. These penalties will vary from provider to provider, but they're never cheap.

A Cycle of Compounding Debt

Paying a late fee might not seem like a huge deal if it buys you a little time. But for many people, those fees can cause an endless cycle of climbing debt. Providers rarely have sympathy and can continue charging late fees until you catch up.

You may take months to overcome those added penalties if you don't have much wiggle room in your budget.

Rising Interest Rates

Here's another way a single late payment can become a debt cycle. Many credit card companies will reset your interest rate to a higher penalty APR. It's often as high as 29.99 percent! That means you'll pay more over time, all because of late payment.

Things happen, and late payments are sometimes unavoidable. But if you can take steps to stay on top of your bills, do so! Use a bill tracking app to keep up with your finances and avoid these financial headaches.

Author Resource:-

Emily Clarke writes about cash advances, overdraft protection & finance apps. You can find her thoughts at bill tracking tools blog.