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The Impact Late And Missed Payments Could Have On Your Credit Score

No one is perfect. Sometimes you make mistakes. But what if you miss a credit card payment or pay it late? Will your credit score drop? How long will the damage last?

One time thing or regular occurrence?

If late or missed payments are regular occurrences in your credit history, these events will most likely have an effect on your credit score. As late payments become more frequent - or longer in duration (see below for more information) - the more potential damage that can be done to your credit.

With the exception of currently late payments, a one-time late credit card payment most likely won't have a dramatic effect on your credit score. As noted by finance writer Gerri Detweiler, there is even a chance that a late payment will not even appear on your credit report. It all depends on your creditor. She explains that most creditors will not report a late payment to the credit bureaus until it is more than 30 days late. This gives you a slight grace period (depending on your lender) to get your payment in before it appears in your credit history.

How late is too late?

The later your credit card payment is the greater chance it can affect your credit score. For example, one 90-day late payment could affect your credit for up to seven years. This negative factor flags you as likely to have another 90-day late payment.

Below is a breakdown of how the length of lateness may affect your credit:

  • 30 days late: Harms your score if your report states that you are 30 days late, or if you are often 30 days late. One 30-day late payment should not cause lasting damage to your credit score, but multiple late payments may be bad for your credit score.
  • 60 days late: Similar to 30-day late payments. Your score could be negatively impacted if late payments are common occurrences.
  • 90 days late: 90-day late payments can negatively affect your credit score for up to 7 years.
  • 120+ days late: This can affect your credit in a similar fashion as the 90-day late payment. However, many times payments this late are typically "charged off" or sent to a collection agency. These occurrences could further damage your credit.

Check your credit history for late and missed payments

Paying all of your bills on time is not always a guarantee that you don't have to worry about late payments. Clerical and computer errors, identity fraud, and forgotten accounts you had could cause late payments to appear in your credit history and damage your credit score.