Late Payments & Your Credit Score


Not making payments on time may not be a big concern to you, but it is a big deal to your creditors. Payments made on time, keep your integrity intact. Late payments can cost you not only in late fees and over the limit fees. It will severely damage your credit score.

Staying on top of your bills is the most important thing you can do to keep your FICO score in good standing. The largest factor determining your FICO score is your payment history. Paying on time keeps your score high, continued late payments keep your score low.

Being late one time does little damage; you can rectify that with your lender. However, if you are late more than 30 days, or 120 days it will drop your credit rating by 100 points, at least. This may be an excellent time to contact us at and see how we can help you come out from under that debt. Understanding how lateness affects your score is very important.

Late Payments Really Hurt!
30 days late will only do damage when your lender reports it to the credit score companies. A one-time tardiness may not be recorded. However, continued 30-day lateness will reduce your score.
60 days lateness goes on record as “currently late 60 days”, if you are late 60 days often, it causes long-term damage to you FICO score.
90 days late will create serious damage to your score lasting seven years. Even if you bring your account to good standing the 90 days late will stay on your record for seven years, and will give other lenders the impression that you are more likely to make late payments again. This is a definite score dropper; try to avoid being 90 days late.
120 days late or more does not cause your score to drop more than being 90 days, but it does put you in danger of being “charged off” this means your account is sold to a collection agency. When this happens, it is reported to credit score companies, lowering your score by more than 100 points.
Going beyond 90, or 120 days will go into what’s called collection. It will be either an internal collection department, or a third party collection agency. This type of lateness will stay on your credit score record for seven years lowering your score, and damaging future dealings with lending companies.

When you go into a repossession of a car or a foreclosure of a home, it is considered a serious delinquency and will reduce your score substantially for the next seven years or more. You would think that if they have your home, or car, you come out even with them so why report it. Unfortunately, that’s not the way it works. A lender will say that your signature on their contract obligated you to keep paying and be in good standing. Once that contract is broken, they will report you to a credit bureau.

If you have a tax lien, it goes on your credit report, and the effect is the same as being delinquent. When the lien is removed, you will recoup the points that were lost.

Negotiating a settlement of an account does not clear your credit. When the payment goes through, you may think you are now in good standing with your creditor. Not so, they will report it as a debt settlement, and it will hurt your score just as much as any other serious delinquency.

The above may seem like there is no way out. Not true, there is hope in fixing the situation over time. The first thought is to avoid making late payments. You must realize that paying bills on time is the hand shake that tells your lender you are trustworthy. If, however, you have gotten into this situation because you lost a job, or you went through an illness, you can talk to your lenders explaining the situation. Lenders rather hear from you and try to solve the problem before the account goes into collection.

You can begin by making payments on time resolving lateness issues. This is especially beneficial if you are at the 90-day late mark. When you catch up to your bills, check your credit report. Make sure there is a record saying that you caught up to your bills. Credit score companies do make mistakes. If your situation needs outside help, seek the advice of and embark on a path to repairing your credit score, and freeing yourself from debt.