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If you’ve ever made a late payment, you know how frustrating the results can be. Not only are you tagged with expensive late fees, but it can affect your credit too. In fact, your payment history is the largest factor that makes up your credit score, accounting for 35% of the total number.
Fortunately, not all red marks are created equal, and any dings on your report won’t last forever. Here’s how long you can expect to see a late payment stay on your credit report and how it can impact your credit score.
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What Is Considered a Late Payment?
Technically speaking, a payment is late as soon as it’s past the due date, even if it’s one minute past midnight. If you’re looking for the nitty-gritty details, check your contract to see when your payment is specifically due. For example, your payment might be due by 5 p.m. instead of midnight.
However, once the deadline passes, many creditors have what’s called a grace period for you to make your payment before charging a late fee. Once the grace period is over—or if there is no grace period outlined in your contract—your provider will typically charge a late fee.
When Do Late Payments Fall Off My Credit Report?
If you make a late payment, it stays on your credit report for a full seven years unless it’s an error. If it is an error, be sure to submit a dispute to remove it from your report. After seven years, it’ll drop off your credit report and won’t affect your credit score.
As a late payment gets further in the past, it’ll start to affect your credit score less, even though creditors will still be able to see you slipped up. It’s hard to predict how long it’ll take for your score to recover from a late payment, but one FICO study can help shed some light on the issue.
According to FICO, depending on how high your credit score was to start, it can take between nine months and three years for your score to fully recover from a 30-day late payment. For a 90-day late payment, it can take between nine months and seven years.
How Does a Late Payment Impact My Credit Score?
If you’ve recently missed your payment, you still have some time before it affects your credit score. Late payments aren’t reported on your credit report until they’re at least 30 days past due. After that, it’ll be placed into one of these buckets:
- 30 days past due
- 60 days past due
- 90 days past due
- 120 days past due
- 150 days past due
- Charged-off (i.e., eventually, the creditor will write it off as a loss)
If you’re late on making a payment, your provider will report it based on this schedule. The later it is, the more damage it will cause to your credit score. For example, a 150-day late payment will drop your credit score more than a 30-day late payment. This is why even if you’re late, it’s best to pay it off as soon as possible so that it doesn’t harm your score more.
In addition to how late your payment is, a few other factors related to late payments can affect your credit score, including the:
- Balance you owe with each late payment
- Number of late payments on your report
- Time elapsed since you made the late payment
- Number of other on-time payments you’ve made
Related: How To Review Your Credit Report
How Can I Reduce the Impact of a Late Payment?
If you’ve made a late payment, don’t panic. Almost everyone has made a late payment, intentionally or not, even if you’re just starting to build credit. According to a 2020 Experian study, almost 1.5% of all consumers have a late payment between 30 and 180 days past due on their credit report.
If you have a good track record of paying on time (especially over a long period of time), call your creditor to see if they’re willing to waive the late fee. Many, but not all, creditors are willing to forgive an occasional late payment.
Next, if you’re able, pay off some—or ideally, all—of the late payment that’s due. The smaller the amount that’s past due, the less impact it will have on your credit score.
If you’re not able to pay it off, make sure you at least touch base with your creditor and explain the situation. It may be able to offer a payment plan solution instead of sending your account to collections.
How Do I Avoid Late Payments?
The easiest way to avoid late payments entirely is to sign up for autopay on all your accounts. If you’re not budgeting regularly, try setting up these payments for right after you get paid, when you have the most cash.
A lot of people don’t like to do this in case they overdraft their accounts, which is a legitimate concern. Alternatively, you could try some old-school tricks like writing due dates on a calendar or a recurring to-do list.
If you find yourself making late payments often, it might be a good idea to have a chat with yourself and your family about your budget. Most people are able to find expenses to cut and ways they can earn extra cash. But if that’s not an option for you, try talking with a credit counselor through the National Foundation for Credit Counseling. It’s an affordable solution that anyone can use to help better manage their finances.
Raise Your FICO® Score Instantly with Experian Boost™
Experian can help raise your FICO® Score based on bill payment like your phone, utilities and popular streaming services. Results may vary. See site for more details.
