Credit Repair: When Will A Late Payment Hurt My Credit?

Learn how late payments can affect your credit report.

It is important to have a good credit record. A good credit history can help you to secure credit cards, home and automobile loans and can even influence potential employers.

Late payments are one of the factors that can negatively impact your credit report. When a creditor reports a late payment to the credit bureaus, they indicate the following information:

- how many payments were made in what time span

- how long ago the late payments were

- how late the payments were

- the amount that was past due, or paid late

All of this information is factored into a credit score. All late payments are not considered equal. The greater the number of late payments and the longer the accounts were delinquent, the more negatively it will affect the credit report. Most lenders also consider more recent delinquencies to be more serious than old problems that have been followed by a history of on-time payments. So, if a payment is late, it should be made as soon as possible, and even a partial payment is better than a delinquent payment when added into the overall credit picture.

Which late payments get reported to the credit bureaus is up to individual lenders. Lenders are not required to report your credit status or payment history to the bureaus; reporting is purely voluntary. Some lenders report the negative information to credit bureaus, but not the positive. You may request that your lender report your good payment history to the bureaus, but there is no way to make sure they do so. Because nothing governs the way lenders report their information, it is hard to predict which late payments will appear on your credit report and when they will appear. For example, some credit card companies report everything to the bureaus twice a year. Many companies only report delinquencies over thirty days to the bureaus; these might be reported immediately when the thirty-day mark is passed, or saved and reported at regular intervals.

Because there is no definite way to know which late payments are reported, the best way to avoid bad marks on your credit report is to pay everything on time, all the time. Most lenders will not report a regularly paying borrower who occasionally makes a payment a day or two late; they may charge their own late fees, but will not necessarily pass this information to the credit bureaus.

Late payments have one of the greatest and most immediate impacts on credit scores.

A single payment that is thirty days late can reduce your FICO credit rating score by approximately 50 points. Over time, it can rise again if on-time payments are regularly made and no additional late payments are added to the score. While all late payments are serious, many lenders consider late mortgage payments to be more of a red flag than late credit card payments. So, if you must pay something late, it is probably better to pay a credit card bill late than a house payment. And, best of all is to make all of your payments on time.

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