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 hurt your credit score and affect your overall 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'll usually 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're in otherwise good standing with your bank, consider getting in touch with them and requesting that the late fee be forgiven and removed.
  • 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 by checking your free credit reports on Credit Karma. We break down the factors that can affect your score, so you can keep an eye on your payment history along with other important areas. 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
534 People Helped

Helpful to 534 out of 645 people

want to know if credit score gets better.

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1 Contribution
91 People Helped
Helpful to 91 out of 147 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.

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5 Contributions
37 People Helped
Helpful to 27 out of 37 people

Your score will get better a little at a time if you follow all the guidelines. 

1 Contribution
278 People Helped

Helpful to 278 out of 367 people

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

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9 Contributions
364 People Helped
Helpful to 303 out of 323 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.

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3 Contributions
131 People Helped
Helpful to 113 out of 129 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.

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1 Contribution
295 People Helped
Helpful to 295 out of 325 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.

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