What is the most likely outcome for a consumer who makes late payments consistently?

Consistent late payments are detrimental to a consumer's credit health primarily because payment history is a significant factor used in calculating credit scores. Credit scoring models, such as FICO and VantageScore, heavily weigh whether or not payments are made on time. When a consumer makes late payments, it indicates to lenders that they may be a higher-risk borrower, which can result in a drop in their credit score. A lower credit score can affect the consumer’s ability to obtain new credit, secure favorable loan terms, or even result in higher insurance premiums.

The other options do not align with the implications of consistently making late payments. For example, receiving discounts on future payments or increasing credit limits typically occurs when a consumer has a strong payment history. Similarly, reduced interest rates are usually a reward for good credit behavior and timely payments, not a result of consistently late payments. Understanding the consequences of late payments can help consumers prioritize their financial responsibilities, ultimately leading to better credit outcomes.