How a Missed Payment Affects Your Credit Score

Key takeaways

• A missed payment less than 30 days late isn’t usually reported, but the longer you wait after that, the heavier the hit to your credit score.
• If you’re later than 120 days, your creditor might send the debt to collections and close your account.
• Contacting your creditor can help you learn about options, including any hardship programs.
• If you’re struggling with your bills, talking to a credit counselor can also be a good idea.

How much does a late payment affect credit? It depends how quickly you can make up the payment and get your account current. The clock usually starts ticking 30 days after your payment due date, with the effect on your credit growing the longer you wait.

Catching up on your credit card bill or car loan can stop the damage, and you can often make things better by communicating with your creditor.

What’s considered a missed or late payment?

You’re in the “missed” or “late” payment window after 5 p.m. on your payment due date (based on the creditor’s time zone). But really, creditors don’t usually report you to the credit bureaus until 30 days after your missed payment.

This gives you a grace period to make up for that missed payment before it affects your credit, although the exact length of the grace period depends on the creditor.

But be aware that even before the 30 days are up, you could still get charged a late payment fee or see your account’s annual percentage rate (APR) interest go up for missing your due date.

How do missed or late payments affect my credit?

How much a late payment affects a credit score depends on just how late it is.

• Before 30 days: There’s usually no credit impact, since many creditors don’t report a late payment to the credit bureaus until it’s 30 days late.
• 30 to 59 days past due: The late payment will show up on your credit report and start to hurt your credit score. There are different models used to calculate credit scores, so the exact impact might depend on which credit score you look at. For example, payment history makes up 35% of most FICO scores but 40%-41% of VantageScores.
• 60 to 89 days past due: Beyond the 60-day mark, the damage to your credit may increase, and you may see an interest rate hike for your account (if you haven’t already).
• 90 to 119 days past due: After 90 days, the seriousness again increases, with possibly further increases for interest rates or other late payment penalties.
• 120 or more days past due: At this point, creditors might send your debt to a debt collection agency and close your account, which can further decrease your score.

How long do late payments stay on a credit report?

Late payments can stay on your credit report for up to seven years.

But the good news is that credit scores do account for how much time has passed since your last missed payment. The longer you go without a missed payment, the better it is for your score.

You can check your credit score for free with LendingTree Spring or another credit monitoring service.

What to do if you have missed or late payments

Of course, the best way to solve a missed or late payment is to catch up on your minimum payment as soon as possible, including any late fees.

• If there are extenuating circumstances around your payment: Let your creditor know about financial issues you’re experiencing. There might be financial hardship programs that let you skip a late fee or temporarily lower your payments.The earlier you can contact your creditors about these programs, the better.
• If it’s your first time missing a payment: Some creditors will remove your first late fee, so it may be worth checking.

Once you do catch up on your payments, consider setting up automatic payments for your various accounts. This can help avoid future missed payments, so long as you feel sure you won’t overdraw your bank account.

The longer you can avoid late payments, the better it will be for your credit.

If you’re having trouble keeping up with your bills, you can get in touch with a qualified credit counselor to help find solutions.

How to remove late payments from credit report

In some cases, late payments can be removed from your credit report.

If you believe the late payment report is a mistake, you’re entitled to an investigation. To do that and get that late payment removed, contact the credit bureaus and tell your creditor you want to dispute the error.

There are also goodwill adjustments, where the creditor voluntarily removes a missed payment report at your request, usually to help your credit score so that you can access other loans.