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How Does a Late Payment Affect Your Credit?

A payment that's at least 30 days past due could drop your score as much as 100 points. Here's how to react and strategies for the future.
April 1, 2020
Credit Score, Personal Finance
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On-time payments are the biggest factor affecting your credit score — so missing a payment will sting.

If you have otherwise spotless credit, 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?

By federal law, a late payment cannot be reported to the credit reporting bureaus until it is at least 30 days past due. 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. Since payment history is the biggest element in what makes up your credit scores, going 30 days or more past due can really hurt.

How do I know there’s a late payment on my credit report?

Keep an eye on your account activity with a personal finance website. With NerdWallet, you can check your TransUnion credit report and your credit score whenever you like.

If you see a late payment pop up, check all three of your credit reports at AnnualCreditReport.com. You’re entitled to at least one free copy from each credit bureau every 12 months.

What can I do if I slip up?

If you’re less than 30 days late: You probably were hit with a late payment fee and perhaps a higher APR, but your credit won’t suffer as long as you pay before the 30-day mark. If you’ve never or rarely been late, call the creditor and ask if it will forgive the fee.

If you’re more than 30 days late: 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. When your account is current, you can write a goodwill letter asking the creditor to remove the negative mark.

If it’s an error: Credit reports sometimes include mistakes. Dispute the error and ask the credit bureau or the creditor involved to take it off your credit report.

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

It can stay on your credit report for seven years after the account was initially reported late. However, the impact on your credit fades with time.

Will a partial payment keep me from being reported late?

Unfortunately, no. It can feel like a good-faith effort to send at least something when you can’t afford the minimum payment or a regular bill. But partial payments won’t let you avoid being reported late and perhaps sent to collections.

How can I avoid late payments?

Focus on preventing problems with these strategies:

  • Many credit card issuers allow you to select payment due dates. You may want to stagger due dates to work with your paydays or bunch them up to help you remember.
  • Set up text alerts or calendar reminders about bills due in a few days. If you need more than one, set up multiple electronic nudges.
  • Consider using automatic payments. If you’re worried a larger than usual balance might cause an overdraft, check whether you can set a payment rule to pay the minimum as soon as the statement issues. You can go online later to pay more, and paying in full is best, but this way your account is never late.
  • Consider making payments on your credit cards throughout the month. Paying down the balance every week or so protects your credit two ways: You’ve already paid by the time the due date hits. And keeping your balance low relative to your credit limit improves your credit utilization, which is the second-biggest influence on your score.

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