How Late Payments Can Affect Your Credit

How Late Payments Can Affect Your Credit

***IMPORTANT NOTE: Please remember that Credit Karma is not a credit bureau and does not handle disputes. All of the credit report information you see comes straight from your TransUnion credit report. Before filing a dispute, check your full credit report for more information and read this guide.***

Making a late payment on your credit card, mortgage or loan can lead to several negative consequences that could ultimately sink your credit score and damage your credit health. Whether you are just three days late or 30 days late, not paying your bills on time could affect you for months and potentially years to come.

Effects of Late Payments

Banks and issuers consider payment history when evaluating your credit risk and deciding whether or not to approve you for credit. A long-standing history of on-time payments suggests that you are a responsible and reliable borrower; a poor history of on-time payments suggests that you may not repay debts and could result in a costly loss to the bank or issuer.

Being unreliable with payments is a red flag to financial institutions, and several things can occur when you pay late.

  • You usually will be charged a late fee. If you pay your credit card bill a single day after the due date, you could be charged a late fee in the area of $25 to $35, which will be reflected on your next billing statement. If you continue to miss the due date, you can incur additional late fees.
  • Your interest rates may rise. Paying your creditors late may result in an increase in your interest rate, often resetting your interest rate to a penalty (or default) APR. For credit cards, the penalty APR is often as high as 29.99%, which means you'll pay significantly more in interest on your outstanding balance if it's triggered. If you have a promotional 0% APR on a balance transfer credit card, paying late may also forfeit your 0% promotional rate and reset it to the default interest rate.
  • It may end up on your credit report. If your payment is more than 30 days late, the three major credit bureaus are usually notified, meaning the late payment will show up on your credit reports. A late payment on your credit report could stay on your credit report for seven years.
  • It might decrease your credit score. Payment history information typically accounts for nearly 35% of your credit score, making it one of the single most important factors in calculating your score. Just one late payment can drastically lower your credit score, especially if you have a good or excellent credit score. Depending on how late your payment is, how frequently you pay late and what your credit score is, late payments can severely affect your credit.

Paying late is a dangerous credit habit that could lead to more damaging credit actions, such as neglecting an account until it becomes delinquent or sent to collections. An account in collections may remain on your credit report for seven years and cause even more damage than a late payment.

What to Do if You've Made a Late Payment

If your bills are past due, the sooner you can pay the bill, the better. The damaging effect of a late payment on your credit score can increase the longer the delinquency.

If you've made a late payment recently, you could attempt to do the following:

  • Request removal of a late payment fee. If you were charged a late fee for a late credit card payment, but are generally a good customer, consider getting in touch with your issuer's customer service line or online chat service, and requesting that the late fee be forgiven and removed. If you are otherwise in good standing with your issuer, they are more likely to compromise.
  • Work to reset your penalty interest rate. If a late payment caused your interest rate to increase, your issuer is generally required to reset your interest rate back to the pre-penalty rate if you make six months of on-time payments, so get back on track and start making on-time payments.
  • Pay all accounts on time. If a late payment caused your credit score to drop, the best thing you can do is to continue on-time payments on all of your accounts. After a few months of consistent on-time payments, your credit score could slowly improve. An easy way to prevent late payments is to set up automatic payments and email or text reminders on your financial accounts.

Finally, keep track of your overall credit health with Credit Karma's free full credit report and other tools, which help you keep an eye on your on-time payment history and other important credit score factors. Paying on time every month could help you build good credit history and improve your credit score over time.

Editorial Note: The editorial content on this site is not provided by the bank or issuer. Opinions expressed here are author's alone, not those of the bank or issuer, and have not been reviewed, approved or otherwise endorsed by the bank or issuer. Credit Karma may be compensated by companies mentioned through advertising, affiliate programs or otherwise. It is this compensation that enables Credit Karma to provide its members with services like free access to your credit scores and free monitoring of credit and financial accounts at no charge.

 

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

All Comments

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1 Contribution
494 People Helped

Helpful to 494 out of 598 people

want to know if credit score gets better.

Reply by
tigerjean2

2 Contributions
15 People Helped
Helpful to 15 out of 22 people

Honestly, It does.  There is something wrong with the calculations on this web site it is showing that I have a terrible pay history.  I researched  and they are showing something different then Credit Karma.  Right now, I am working to try and clear a mess.  Accounts which were paid showing unpaid....... Unfortunately because it is showing on my credit report the process of clearing it up would require court.

Reply by
Carla501

1 Contribution
59 People Helped
Helpful to 59 out of 91 people

Thank you. I'm disappointed in myself but I'm in a bad financial hardship situation and had no choice but not make payment. I told them of my situTion but no one was really heard me. So now I'm looked on as being a bad person. I sent doc forms, they was never took serious. So now I'm being punished. Thanks for  your comments. God bless u.

Reply by
calipatient

2 Contributions
1 Person Helped
Helpful to 1 out of 1 people

Computers are wonderful when used correctly'; the downside is it robs people of the "human" touch.  People used to be judged on their character; computers see everything as black and white.

Reply by
creditcorna

1 Contribution
53 People Helped
Helpful to 53 out of 114 people

iksc1430....WTF?  was that English?

Reply by
lksc1436

1 Contribution
41 People Helped
Helpful to 41 out of 157 people

I have call them and it is area on the part of them.  from them need get hold of company please they were never paid late. at bill has been paid off linda schulz case.   please call they complany asp please  stop me from get house am very set now 

1 Contribution
260 People Helped

Helpful to 260 out of 339 people

iis it possible to pay the balances of the items your report shows in collection and improve my credit score?

Reply by
azuretech

9 Contributions
190 People Helped
Helpful to 136 out of 145 people

Yes.... BUT.... Do it the right way.... If you simply send them the payment, it can actually HURT your credit score.... For example, lets say you have a collection account that is 4 years old.... because of its age, its impacting your credit, but not by that much.... As soon as you make the payment, it gets a new date... NOW its a RECENT collection account, and it hurts your credit WAY more.... The trick with collection accounts... Send a letter and make an offer to them.... Be very careful with your wording.... You basically want to tell them that you're not acknowledging the debt, but in the interest of reaching a settlement, you will agree to pay them a certain amount, on the condition that they REMOVE and/or agree to report your account as "UNVERIFIABLE" (which requires that credit bureau remove it). Get a written letter from them agreeing to this upon receipt of your payment.... Don't send payment until they agree in writing. A lot of times they'll verbally agree, or twist the wording to merely that they'll report the account as paid... That's not good enough... You want it IN WRITING that upon receipt of payment, they'll REMOVE the account OR will report it as UNVERIFIABLE... Once you get the letter, you send them the payment.... a month or two after that, if the account has not been removed, file a dispute with the credit bureau.... You can then provide their written letter, and proof that you complied with your half of the deal by showing you made payment.... Then it must be removed and the FCRA... and THIS will improve your score.

Reply by
Diddi55

1 Contribution
276 People Helped
Helpful to 276 out of 301 people

Yes, and no. The collection will still show on your credit report, but it will show as a paid collection. I'm not sure if it changes your score, but lenders definitely look more favorably on paid collections, because it shows that you took the steps necessary to resolve the account and that you actually care about your credit.

Reply by
marshall1141

3 Contributions
101 People Helped
Helpful to 87 out of 98 people

Negative.  Your history is your history.  Even if paid off, they will stay on your record for the legal 7 yrs.  After that, it is a question as to whether THEY( your creditors)  re-activate your past history.  Then it will show again.  I went thru all this mess as I was applying for a new house thru the VA.  But , it does help to clear old history IF you write those creditors, and request the removal.  It is your right to request it, but it is up to them to do so.  They can say "yea" or "nay."  I went thru several years ago.  I am sure that if you ask them, they might work with you.  It is best not to tell them WHY you are asking.  Just advise you just want to clear your record of old history.

Reply by
radu0203

2 Contributions
36 People Helped
Helpful to 2 out of 3 people

Yes it can help your credit score but will still remain on your credit report for up to seven years, some ten depending what it is on your credit report. I had a lot on mine and paid all but one or two off. I was apply to get a car loan. Also, it helps if you once you pay some of it off to get a credit card with a small limit on it. But make sure you only use at least 10 to 15% of what is on it. Pay it on time and it will help your credit score increase.

Reply by
rm2fiddy

1 Contribution
21 People Helped
Helpful to 21 out of 37 people

yes

Reply by
wills78nova

1 Contribution
0 People Helped

Most creditors will remove the account from your credit report if you pay the balance in full. Be sure to ask for an agreement in writing. I have removed 13 collections from my report this way. 

Reply by
brendamanzo

2 Contributions
0 People Helped

k

Reply by
azuretech

9 Contributions
190 People Helped

ALWAYS keep this fact in mind when dealing with collection agencies.... THEY ARE BOTTOM FEEDERS... THE LOWEST OF THE LOW... THEY WILL LIE TO GET PAYMENT... (and even after they're paid, some will sell your debt to another collection agency).... GET EVERYTHING IN WRITING.... Taking notes and names is useless (typically they won't give you a REAL name over the phone anyways)

Reply by
PBrewster

1 Contribution
1 Person Helped
Helpful to 1 out of 3 people

Not really, once it is there it will stay there publicly for as long as the law allows and what is not visible who knows for sure. Acollection agency placed a charge off on my record on the 3rd of this month and I can't even  find out who it was from or how much!!

Reply by
FantasticSam

1 Contribution
0 People Helped
Helpful to 0 out of 1 people

Yes, but once you do so make sure you save all of your receipts for payment.  I usually save mine in a separate folder for months to come, just in case.  And very important to contact the company you have in collections right before you pay them and tell them that you will only make the payment if they agree to take this negative account off your credit report.  Make sure u have a pen and paper handy.  Write down the time and date of the conversation, name of representative, reason for call, the outcome of the phone call, in other words, everything that representative says to you over the phone must be written.  Ask for their name.  That simple! How to find the phone number of your account in collections...... Everything is always on your credit report, just look in the same place that your account in collections is listed.  Most likely, their contact info. Is all there.

Was this helpful? Please respond.  Thanks, sincerely Jessica

2 Contributions
202 People Helped

Helpful to 85 out of 117 people

I find the credit bureaus to be nothing more than a bunch of crooks, just like the politicians. They write good things about certain people who have connections.. There are many big organizations and so-called upper echelons who file bankruptcy and do not pay their bills, but they cannot be touched and they do not get bad write-ups. I prefer to have a character reputation because then the truth would come out about those who are still getting away with their bull. I have know some people who really suffered because of bad reports that were not true, but they did not have what they really needed at the time, and that was a good lawyer that would sue them for all they have.

Reply by
unkleruckus

2 Contributions
80 People Helped
Helpful to 80 out of 92 people

You are very right. The whole notion of todays credit score is draconian, and helps to feed the growing inequality. There is no clear reason why some people have great credit, yet pay bills late or not at all, while those of us who work very hard to keep everything current and not get screwed, end up getting screwed anyway. It takes less than a day to drop your rating hundreds of points, but years upon years to bring it back up even a little. I am fed up!

Reply by
RVN11B

1 Contribution
25 People Helped
Helpful to 25 out of 37 people

Wonder what Donald Trump did...  oh, that's right, corporations were once not people but now they are.  Good timing, The Donald!

Reply by
usa666

1 Contribution
11 People Helped
Helpful to 11 out of 30 people

Your kidding right? Keep your credit up and you won't have a problem. My grandparents have excellent credit and it had nothing to do with the bs you mentioned above. I'm guessing you mentioned it because you have bad credit? Or someone close to you? Just pay your stuff on time and don't use up all your credit cards. 

Reply by
singhb1

1 Contribution
0 People Helped
Helpful to 0 out of 2 people

Sounds like someone with a sh*tty credit score.

1 Contribution
71 People Helped

Helpful to 71 out of 95 people

The only late payment I have ever made was the one Bank Of America told me not to make while my mortgage was being modified, but it shows up as late, how can I get that removed

Reply by
avg1dh

1 Contribution
65 People Helped
Helpful to 65 out of 72 people

Were you able to get this removed? I have the same problem and B of A refuses to acknowledge that they instructed me to stop making payments and then damaged my credit by reporting late payments. I wonder how many people had the same thing happen to them. Class Action anyone?

Reply by
neek0109

1 Contribution
28 People Helped
Helpful to 28 out of 31 people

I had the same issue with Chase... I was attempting to do a loan modification and they advised me not to pay my mortgage because it would cause problems with the loan modification... I had never missed a payment in the life of the loan, I went with their recommendations and now my credit has been impacted. I have made several attempts at having the information removed from my report but the bureaus won't do it. I also contacted the bank to have them fix it and they won't. This is bad business and I wish I could hold them accountable legally!

Reply by
rcrnut38

1 Contribution
5 People Helped
Helpful to 5 out of 7 people

I had the exact same thing happen to me as well but it took them about 6 months to redo our mortgage and reported us late every month and we asked them to remove them but they said no...

Reply by
techno13tech

1 Contribution
0 People Helped

This is normal. They cannot justify a modification without you missing a payment to do a restructuring of the loan. And yes, it does impact your score since it was your obligation to meet the original terms of the loan. That is the penalty that comes with doing a modification. A refinancing would not have caused this problem, but to justify the modification, you have to be "unable to pay" your loan. It does damage your credit for a time, but it will fall off like usual (a 60-day late is usually the modification sweet spot).

1 Contribution
153 People Helped

Helpful to 153 out of 190 people

I've been studying credit bylaws since 2007 and this is the best credit educational tool that I have come across...... 

Reply by
divershere

1 Contribution
4 People Helped
Helpful to 4 out of 5 people

I have been reading Tim Roberts reccomdations and have had a couple bad remarks removed from my Credit report. good information

1 Contribution
30 People Helped

Helpful to 30 out of 37 people

I applied for a vehicle loan and had 10-15 credit inquiries even after I purchased my vehicle. How can I remove these inquiries?

Reply by
radu0203

2 Contributions
36 People Helped
Helpful to 34 out of 39 people

They will automatically drop after 1 year and some take 2. If you can get approved with a bank it's better to get a car loan with them because it will only give you one credit inquiry a car dealer will do many more. 

Reply by
marshall1141

3 Contributions
101 People Helped
Helpful to 14 out of 16 people

who made the inquiries?  The same dealer?  Ask the bureau that shows the inquires and if you have to, send them a letter with a copy of the purchase contract showing the date of purchase, and a request that those extra inquiries be removed.

1 Contribution
25 People Helped

Helpful to 25 out of 34 people

Here's the best info. credit scoring is a joke. Spent 15 months paying an dong everything I was told for no gain.  Got crushed with snow where the mail couldn't move. I got banged for 37 points. Keep your game I'm going back to cash.

1 Contribution
48 People Helped

Helpful to 48 out of 65 people

I had a truck repossessed back in august of 2007. The original creditor dinged my credit with the repo and late payments. But now the collection agency has now turn in a default loan against me for the same amount and now my credit shows a repo of 7700 from the original and a 8600 debt to the collection agency on the same same debt. Is it me or is this just wrong that they can show the same debt twice by 2 different companies? Any one know if this can be disputed and at least have the collection agency removed? I have never heard from them or had any dealings with them but after calling them they told me that they had the right to put it on my report because they bought out the outstanding debt from my original lender. Deoes this seem right to anyone. HELP 

Reply by
sabolton01

1 Contribution
64 People Helped
Helpful to 64 out of 74 people

No that is not right. You need to dispute one of them (probably the bank) because they sold the account to the collection agency. Just contact the credit reporting agencies to dispute.

Reply by
Exwaster

2 Contributions
49 People Helped
Helpful to 47 out of 64 people

I can help you with this if you still need help?

Reply by
tinktink3447

1 Contribution
3 People Helped
Helpful to 3 out of 4 people

happened to me too &they r no help at all. this 7 year thing is crap. it has been 24 years & still there from myex-husband

Reply by
tmpoe32

2 Contributions
0 People Helped

I am dealing with the same thing, where the same debt is showing up 3 times to the credit bureau. Please let me know if you find a solution cause they are tearing my credit apart. Who do you contact and why won't they accept that you paid it off from the initial creditor? So it seems as if the want you to pay for the same thing numerous times. I don't understand this.

Reply by
brendamanzo

2 Contributions
0 People Helped

k

Reply by
gambler613

1 Contribution
0 People Helped

take it to a lawyer and explain what has happened its aguinst the law for 2 colection agancys to try to collect for the same bill

Reply by
MickeyD69

1 Contribution
0 People Helped

Your one from the original is supposed to say 0 because it was sold. You need to write that creditor and demand it be taken off because they are not following the law

Reply by
Exwaster

2 Contributions
49 People Helped
Helpful to 2 out of 4 people

I can help you with this. 

1 Contribution
42 People Helped

Helpful to 42 out of 64 people

Let's see I declared Bankruptcy so I would start over with a clean slate. Not in America. 2 Companies one Bank of America sold my debt to collection agencies 2 months after my attorney filed my bankruptcy. Now I have a collection agency on my credit history that has left a bad mark against my credit and there is absolutely nothing I can do about it. The other company did the same thing. All this started with Bank of America when one of their employees stole money from my checking account. There is no law unless you own the law. Credit is fake and the system of currency is fake. You must obey venal arbitrary rules and the banks can do as they please including theft and destroying a persons credit and life.

Reply by
azuretech

9 Contributions
190 People Helped
Helpful to 22 out of 25 people

Have your attorney file with the bankruptcy court for violation of the automatic stay.... Bank of America violated the stay by sending it to collection after the bankruptcy filing... They're not allowed to pursue any collection action without permission of the court... that includes selling the debt to a debt collector.

Reply by
traveltheglobe

2 Contributions
31 People Helped
Helpful to 31 out of 45 people

Bank of America cost me $ 4,000 in legal fees and still screwed up my credit and the fault was on their end! Caught between to banking errors and an embezzeling employee...and I'm the one that got screwed. I can't believe the government bails these *** ***** out.  Credit Unions or nothing. No banks. No how. No way.

1 Contribution
34 People Helped

Helpful to 34 out of 47 people

Need to include information on placing a consumer comment on item of late payment. I recently had a late pay on a loan I cosigned. Upon confirmation of information I paid this loan off completely.

With this article I did not get any information to allow me to place my comment with the credit reporting agencies. My credit went from 810 to 638! Doing better now but would like to have creditors see the conditions of this late pay. 

Reply by
azuretech

9 Contributions
190 People Helped
Helpful to 25 out of 31 people

Putting "consumer comments" on your credit are a total waste of time... As a mortgage underwriter, I can assure you, they are given absolutely ZERO consideration... Your score is your score, no matter how great your story is for why.

Reply by
consumerkarma

1 Contribution
24 People Helped
Helpful to 24 out of 31 people

I have a very similar situation. The car was sold and the loan paid in full. My question is why they use 10 years on a car loan that was only a four year loan? The full amount was paid, earlier than the term of the contract. As a co-signer I feel like it's just a way to " squeeze" you into a higher interest rate.

Reply by
kschumaker1971

1 Contribution
3 People Helped
Helpful to 3 out of 6 people

Same thing just happened me my score dropped 75 points form co-signing for some one. My question is is it going to take a long time to get my score back up?

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