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How Does a Late Payment Affect Your Credit?

A late payment — at least 30 days past due — could drop your score as much as 100 points.
April 25, 2019
Credit Score, Personal Finance
late-payment-affect-credit
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There’s no bigger single factor affecting your credit score than on-time payments, so missing a payment will sting.

If you have otherwise spotless credit and a good score, a late payment can knock as much as 100 points off your credit score. If your score is already low, it won’t hurt it as much but still does damage.

Here’s what you need to know about how late payments work and how to address them.

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When is a payment marked late on credit reports?

Just because your wallet got hit with a late payment fee for an overlooked bill doesn’t mean your credit report got hit with a negative mark.

Many creditors automatically impose a fee when your due date passes without a payment posted to your account. (If you’ve never or rarely been late before, you might be able to get the creditor to reverse the late fee.)

But by federal law, a late payment cannot be reported to the credit reporting bureaus until it is at least 30 days past due. So an overlooked bill won’t hurt your credit as long as you pay before the 30-day mark.

What’s on your credit reports is important because that’s the data used in calculating your credit scores.

What’s on your credit reports is important because that’s the data used in calculating your credit scores. And payment history is the biggest element in what makes up your credit scores, so being 30 days or more past due can really hurt.

How do I know if I have a late payment on my credit report?

Check all three of your credit reports at AnnualCreditReport.com. You won’t know unless you look.

If you can show it’s a mistake, you can ask the credit bureau or the company that reported it to remove the negative mark from your credit report.

How long does a late payment stay on my credit report?

It stays on your credit report for seven years after the account was initially reported late. However, a late payment’s impact fades with time.

Will a partial payment keep me from being reported late?

It can feel like a good-faith effort to at least send something when you can’t afford the minimum payment or the regular monthly payment. There’s a persistent myth that doing so can keep your account from being sent to collections or reported late. But partial payments aren’t a way to avoid being reported late or sent to collections.

How can I avoid or limit credit damage from late payments?

Try to bring your account current as soon as possible. Thirty days late is bad, but it’s not as bad as 60, which is not as bad as 90. The sooner you can catch up, the less damage to your credit and the sooner your score can start to recover.

Then, focus on preventing additional late payments, which will ding your score and cost you late fees:

  • Select payment due dates that are either at the same time, if that works for you, or staggered to work with your paydays. Many credit card issuers allow you to select your due date.
  • Set up text alerts that remind you about bills due in a few days. If you need more than one, set up multiple electronic nudges.
  • Consider using automatic payments, but be sure to have enough money in your account so you don’t get hit with overdraft fees. Automatic payments work well with bills that are the same every month, like your car payment. This may not work so well with payments that can vary tremendously, like your credit card bill the month the refrigerator died and your car needed a new transmission days after you returned home from vacation.