Here's What Happens to Your Credit Score When You're Late Paying Rent

There may come a time when you find that you're unable to pay your rent. Maybe you just lost your job and don't have cash in a savings account to fall back on. Or maybe you had to fix your car out of nowhere, and that drained your bank account.

Often, if you need a little extra time to make a rent payment, it's not such a big deal. First of all, many lease agreements include a grace period that gives you built-in leeway for paying your rent a bit after it's due.

But if not, and you're a tenant with a history of paying on time, a talk with your landlord might buy you some more wiggle room. Your landlord might, for example, agree to give you an extra few weeks to hand over your rent check if you explain that you recently experienced a financial crisis.

But as a general rule, a late rent payment has the potential to hurt you financially. So it's important to address the issue with your landlord rather than simply be tardy.

Your credit score may or may not take a hit

If you rent goes unpaid after it's due for 30 days or more, your landlord might choose to report that late payment to the credit bureaus. From there, your credit score has the potential to drop.

Similarly, if you're very late on your rent, your landlord might choose to turn the matter over to a collection agency. From there, you may be even more likely to have your delinquent payment reported.

In some cases, though, your landlord might choose not to take action for a single late rent payment -- even if you're very late on that bill. Ultimately, landlords can choose to report late payments or not, so it's possible that if you're late, you might get lucky.

If you talk to your landlord about why your payment is late, and it's the first time, there's a good chance that it won't negatively affect your credit score. Chances are, if you've been paying your rent on time and there's a one-off situation that prevents you from doing that one month, your landlord isn't going to be a jerk about it and report you right away.

Remember, if there's still time left on your lease, it's in your landlord's best interest to maintain a good relationship with you. So your landlord might give you some grace not just out of the goodness of their heart, but for the sake of having things run smoothly for the duration of your lease agreement.

You might suffer financially in other ways

A drop in your credit score might make it difficult to borrow money the next time you need to, whether it's in the form of a loan or a new credit card. But even if a late rent payment doesn't result in credit score damage, it might hurt you financially in a different way.

First, some lease agreements call for financial penalties when rent is paid after its due date and grace period. So you could be looking at additional fees.

Secondly, if you're late with your rent payments consistently, your landlord is unlikely to renew your lease. So you could end up losing your home. Plus, when you're applying for a new rental, it's common for landlords to contact your former landlords as a reference. If you try to get a new place and you have a history of late rent payments, you may find that you're denied a rental because your old landlords are quick to report your history of being late.

To be clear, this won't necessarily happen if you're late one time. Rather, it's a pattern of lateness that's more likely to get you into trouble.

All told, a single late rent payment may not do any damage to your credit score if it isn't reported. Being upfront with your landlord might prevent that news from hitting your credit report, so get in touch once you realize you're not going to be able to send in that check on time.