If you recently missed a credit payment due date, you might be wondering how long that late payment will stay on your credit report and how much it may impact your credit. The short answer: It can stay on your credit report for years, though the impact may depend on when the late payment occurred relative to your payment due date.
Let's examine what qualifies as a late payment and steps you can take if you make one (or think you may make one) to help minimize the impact on your credit score.
What counts as a late payment?
Payments are generally considered to be on time when you pay the minimum payment due by the due date. (There can be exceptions: For example, credit card companies may give you until 5 PM the next business day if your regular due date falls on a holiday.) If you miss that deadline, or you only make a partial payment — for example, if your credit card’s minimum payment is $50 and you only pay $25 — that is a late payment.
Late payments may not be reported to the credit bureaus immediately after you miss a due date, though you may be charged a late fee at that point. If you miss a credit card payment, your account may also be subject to a penalty annual percentage rate (APR) on new purchases and existing balances, which is higher than the card’s regular purchase APR. That can mean it becomes more expensive to make purchases with that credit card in the future.
Each lender has its own rules for when it reports a late payment to the credit bureaus.
Why are on-time payments important?
Your payment history is one of the most important factors in determining your creditworthiness. Lenders like to see that you can reliably make payments according to the terms of your credit card or loan. A positive payment history can indicate you’re a lower-risk candidate for lending.
A single late payment can have a significant and immediate impact on your credit score once it’s reported to a credit bureau. This may be especially true if you have excellent credit.
Regularly checking your credit report can help ensure that you’re aware of any changes to your credit history and that everything is accurate. You may be able to get a free weekly copy of your credit report from all 3 credit bureaus. If you do see any discrepancies or erroneous late payments, you can dispute them by contacting your lender as well as the relevant credit bureau.
What happens if you make a late payment?
Sometimes late payments happen. If you miss a due date, it’s important to act quickly. Contact your lender or credit card company if you’re at risk of missing a payment or making a partial payment. The same applies if you miss your payment by a few days. The lender may be able to make adjustments, like waiving the late fee, if you contact them proactively.
The credit impacts of a missed payment depend on when you're able to make your past-due payment.
If you pay within 30 days of your due date
If you can make the payment within 30 days of the due date, it generally won't appear on your credit report. However, the longer you go without paying and the more payments you miss, the more it can affect your credit.
If you pay 30 or more days after your due date
After 30 days, generally, the late payment will appear on your credit report. Late payments generally stay on your credit report for 7 years from the date of the missed payment, though the older a late payment is, the less of an impact it typically has on your credit score.
Missing payments for 6 months or more may result in a charge-off, which is when the creditor declares the debt a total loss and may sell it to a collection agency. Charge-offs can also negatively impact your credit score.
How to prevent late payments
There are several ways you can help prevent late payments:
- Set up autopay: Most lenders and credit card issuers will allow you to set up automatic payments from your checking account. This can help you stay on track with payments. Just be sure to keep enough money in your checking account to cover payments you’ve set up.
- Consolidate debt: Consolidating debt with a personal loan or balance transfer credit card could allow you to have multiple debts in one place, which may mean you’re less likely to miss payments. If you can qualify for a low promotional APR, it may also help you save money on interest.
- Set up alerts: You may set up reminders through your creditor or a recurring calendar event so you know when to make payments.
- Budget carefully: Making a realistic budget and tracking your spending may help ensure you have enough to cover the required payments each month.
Taking steps to prevent late payments can help you avoid late fees, penalty APRs and negative credit score impacts. Plus, you may reap the rewards of a positive payment history.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
