How Will One Late Credit Card Payment Affect My Score?

Anyone who's missed a credit card payment knows how alarming it can be once you realize it. You start thinking about how much this will cost you in late fees, and more importantly, what kind of a hit your credit score will take.

It's understandable to feel this way, especially when your payment history accounts for about 35% of your credit score. No one wants an honest mistake to tank their credit. But before you worry, you should know exactly how late credit card payments work and whether your payment will even be reported as late.

What's considered a late credit card payment?

This would make a good trick question on a test. While the obvious answer is "any credit card payment made after the due date," that's not how the credit bureaus see it.

Your card issuer can't report your payment as late to any of the three credit bureaus until it's at least 30 days past the due date. That's because all those credit bureaus use the Metro 2 Reporting Format, which requires that creditors follow the Industry Standard for Reporting Account Delinquency. Here's how it works.

On the reporting date, your card issuer sends a status code about your account to one or more credit bureaus. That code indicates your account's current standing. Accounts from zero to 29 days past due are a Code 11, the code for current accounts. The codes for reporting late payments start with accounts that are 30 to 59 days past due.

This obviously doesn't mean it's a bright idea to take your time with your credit card payments. Your card issuer still can charge a late fee as soon as you miss the due date, and you'll also have to pay interest on the amount due.

The damage a late payment can do to your credit score

You're safe if you get your payment in before that 30-day mark. Any later, and your credit score could be in trouble. There's no set amount your score will drop, as the extent of the damage depends on several factors including:

• Your current credit score.
• Your previous payment history.
• How late your payment was.

You have the most to lose if you've built a high credit score and haven't had any late payments in the past. For example, if you have a credit score of 780 without any prior late payments, just one credit card marked 30 days past due could lower your score by 110 points. As you exceed 60 and 90 days past due, your score suffers more.

Late payments stay on your credit report for seven years, but this doesn't necessarily mean one will continue affecting your score for that long. If you only have one slip-up, its impact will be smaller as it becomes less recent.

If you have a lower credit score to begin with and a couple of late payments on your credit report, then another will likely bring your score down another 60 to 80 points. And every late payment makes it harder to improve your credit score.

How to handle late credit card payments

The best way to deal with late credit card payments is to avoid them in the first place. There are only two reasons for a late payment: You're short on funds or you simply missed the due date. If it's the former, then you need to revamp your financial habits, because the longer you leave credit card debt unpaid, the larger your balance will grow.

It's easy to have a credit card payment slip your mind, especially if you use multiple cards to maximize your cash back or rewards. Setting up automatic payments on all your cards is the most effective way to avoid this.

Should you miss a due date, what matters most is making the payment right away. You'll prevent any credit score issues by getting the payment in before it's 30 days delinquent. Even when it's been longer than that, the sooner you pay, the sooner you can stop the bleeding. If it's your first missed payment with this card issuer, you should also give the company a call to ask about getting the late fee waived. Most card issuers don't mind giving you a break the first time around.

A late credit card payment can hurt your wallet and your credit score, so it isn't something to take lightly. But if you get it paid within 30 days and take steps to avoid it in the future, the worst-case scenario is a late fee that your card issuer may take off your bill anyway. 

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