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How Much Can One Late Payment Hurt Your Credit Score?

Author: Bhavna Singhal
by Bhavna Singhal
Posted: Feb 11, 2021

A credit card allows the card user to use the card for making purchases and expenses as per the credit limit. The amount used is in the form of borrowing and has to be repaid to the credit card issuer. The payments are to be made on the prefixed dates as per the terms and conditions. However, at times the cardholders fail to meet the same and end up being labelled with the late payments. The relationship between the late payments of a credit card and an individual's credit score is directly related to each other. People can miss their credit card payments due to several reasons and can forget for one day or many days.

However, the thing of concern for a late credit card payment is that it must be later than 30 days. If the late payment date exceeds by more than 30 days, the interests and fee are charged by the card issuer. Late payment can impose a bad impact on the credit score. However, if they are paid between 30 to 60 days are in some cases not reported to the credit score agencies. But payment later than this can create a severe impact. If a credit card payment is made beyond 90 days, then the impact of it is created over the credit score for over seven years. It is the duration of the late payment that decides the impact of the late payment. Know how much can one late payment hurt your credit score as listed below:

Payments within 30 days: If you frequently make payments later, but within 30 days then it won't be significant damage. However, if this happens once in a while, the card issuers do not hesitate in giving the cardholder another chance.

Payments within 60 days: Similar to the 30 days situation, if this period is taken often to make payments, then it can create damage to one's credit score.

Payments within 90 days: Payments made later up to 90 days can create an impact on one' credit score up to seven years. Ensure that this is not repeated frequently, as it will severely impact the credit score.

Payments later than 120 days: If your payment is made later than more than 120 days, then the credit card issuer handles off the collection authority of debt to some third party. This can create a very bad impact on the credit score.

Tips to ensure that you do not end up paying late credit card bills

  • Go for auto-payment options: If you are somebody who finds it difficult to remember the schedule of payments, then signing off the auto payments option is a good thing for you. Auto payment options help you automatically pay off your credit card bills on the required dates. These include linking credit card payment to a bank account. However ensure that you have enough balance in your linked bank accounts, to make timely payments. To reduce the burden of the payments, one can even go for weekly payments.

  • Set the reminders: Setting reminders for your financial plans is a wise thing to do. Similarly, setting up reminders for credit card payments can help you remember your credit card payment dates and can help you pay the credit card bill on the required time. For this, one can use online reminders or reminders on mobile phones. Further, you can also sign in for online alerts with your creditors through mails or messages.

Thus, paying off your credit card bills on time is important. Ensure that you make timely payments and do not delay it very frequently and that too for more than 60 days once in a while.

About the Author

A passionate finance writer loves to write about banking and loan services.

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Author: Bhavna Singhal

Bhavna Singhal

Member since: Jul 19, 2018
Published articles: 4

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