Late Payments and Credit Score

What if I’m only a few days late?
You need to be 30 days or more late for it to appear on your credit report. If you are only a few days late on your payments, the late payment won’t go on your credit report.

However, you may still be charged a late payment fee and you could trigger the default interest rate.

What is the effect of late payments on my credit score?
It’s hard to predict exactly how many points your score will drop just because a late payment, because the Fico algorithm is very complex and depends on numerous variables.

In general, people report a drop of 60 – 120 points because of a single late payment. The higher your score was before the late payment – the larger the drop.

For example, while a person with a 770 FICO score may experience a drop of 90 – 120 points due to a late payment, a person with a 670 Fico may experience a drop of only 60 – 90 points.

The effect of late payments on your credit score will be felt strongly during the first two years that follows, and will diminish over time. By the time it ages off your credit report it has almost no effect at all.

If you want to get a better idea of how late payments will affect your FICO score, you can use the FICO simulator available here, or the one provided by CreditKarma.

Can late payments be removed?
No. A detailed record of all late payment will remain on your credit report for 2 years, while a record of you ever being late will remain on your credit report for 7 years.

What if I continue to miss payments?
If you continue to miss payments, your credit report will indicate the amount of days missed every 30 days (i.e. 60 days, 90 days, 120 days etc).

Typically, your creditor will close the account after you’ve missed payments by 120 – 180 days or more. The account will be charged-off, your credit report will be updated to show the charge off status, and the account will be sold to collection companies.