How Do Late Payments Affect Your Credit Score?
Summary
Making a late payment could affect your credit score. Read more about the impact and some tips to make it right.
In this article:
Nobody intends to pay their bills late, but it can happen to anyone. The good news is that a late payment isn’t the end of the world. The consequences can be reduced by acting fast and communicating with your lender. Here’s how late payments could affect your credit score and some tips to make it right.
What happens to your credit when you make a late payment?
Payment history is the most important factor in two of the most common credit scoring models: FICO Score and VantageScore.1 This means one late loan or credit payment could potentially make your score go down. And depending on how long your payment remains unpaid (60 days, 90 days, 120 days, etc.), your score might continue to drop. If your account is ultimately charged off by the lender as bad debt and sent to collections, that can be reported too.
However, it is important to note that lenders can’t report a late payment until it’s at least 30 days late.2 So, you can generally avoid the reporting of a delinquency if your full payment is received and credited no more than 29 days after the due date. Keep in mind that lenders don't have any direct control over your credit score. Credit scores are generated by credit bureaus using proprietary models, and lenders simply report late payments to them.
How long do late payments affect your credit score?
If you’re asking yourself “How long do late payments stay on your credit report?” the answer is about 7 years from when the delinquency began. If you believe a late payment on your report isn’t accurate, follow these steps to dispute and correct a credit report error.
Keep in mind that there are no quick fixes. If you're trying to rebuild your credit after a period of difficulty, you may not see real improvement in your credit score until you've shown a substantial history of timely payments.
What should I do if I missed a payment?
If you’ve fallen behind on a payment, you have options. How much a late loan payment affects your credit score depends on many factors including the actions you take and how quickly you address it. For example, if you have multiple accounts in collections, bringing one of them current may not have an immediate positive effect. That said, follow these steps before you miss a payment or as soon as you have a late loan payment on your hands:
Contact your lender. Most lenders understand people go through tough times. If you call them and explain your situation, they might be willing to work something out with you. OneMain knows that life happens and encourages customers to call 800-961-5577 discuss options with a real person without any judgment.
Cure the delinquency if you can. Making the missed payment before it is reported to credit bureaus is the surest way of avoiding impact to your credit. If you need some ideas for additional income, browse these 22 passive income ideas.
Make a plan so it doesn’t happen again. Whether you need to build an emergency fund or figure out how to stick to a budget, now is the time to figure out why the missed payment happened in the first place, so you can stop it from happening again.
It’s always the right time to face your finances
Whether one payment slipped your mind or you’re several months behind, doing nothing is the worst thing you can do. After you’ve established a repayment plan, you might find that you need some help sorting out your finances and building your credit. Read some free articles on subjects like improving your credit, debt consolidation and budgeting to take the next steps toward your goals.
1. "How To Improve Your Credit Score | Bankrate." 18 Dec. 2020, https://www.bankrate.com/personal-finance/credit/how-to-improve-your-credit-score/. Accessed 9 Jun. 2022.
2. "How Late Can You Make Your Payments Before They Negatively ...." 29 May. 2021, https://www.ncconsumer.org/news-articles-eg/how-late-can-you-make-a-payment-before-it-goes-on-your-credit-report.html. Accessed 9 Jun. 2022.
3. "Late Payments and Your Credit Score." 11 Mar. 2021, https://www.credit.com/debt/late-payment-forgiveness-secrets-revealed/. Accessed 10 Jun. 2022.
This article has been updated from a previous posting on June 27, 2019. Matt Diehl contributed.
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.
