How late payments can affect your credit

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Life happens. 

Sometimes that means you have to prioritize other expenses and make a late payment on your credit card or other loan. Or maybe a bill simply slips your mind. No matter the reason, we know that missing a payment isn’t a good feeling — especially since it can affect your credit.

Read on to learn about how late payments on a credit card or loan can affect your credit health and what you can do if it happens to you.

What happens when you make a late payment?

It depends on how much you owe and how late your payment actually is, but there’s no getting around it: late payments can hurt your credit.

Here are some things you might encounter after making a late payment on a credit card or other line of credit.

  • You could 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, 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. 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 reports. If your payment is more than 30 days late, the two major credit bureaus are usually notified, meaning the late payment will show up on your credit reports. A late payment could stay on your credit reports for up to seven years.
  • It might decrease your credit score. Payment history is a very important factor in calculating your score. Just one late payment can 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, how much you owe, and what your credit score is, late payments can really affect your credit.

The consequences of making a late payment can feel harsh. But don’t let it discourage you from working toward future financial goals. Your credit score can bounce back with time, hard work and patience. The best thing you can do is start working on rebuilding your on-time “payment streak” if possible — even if that means making the minimum payment each month. Making more and more on-time payments and actively reducing the amount you owe can diminish the impact on your score over time.

And, as best you can, don’t let future payments become delinquent or get sent to collections. An account reported in collections could stay on your credit reports for up to 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 you wait.

If you’ve made a late payment recently, here are some things you can try.

  • Request the late payment fee is waived. If you’re in otherwise good standing with your bank, or if it’s your first time missing a payment, consider asking your bank to forgive or remove the late fee.
  • Pay all accounts on time. If a late payment caused your credit score to drop, the best thing you can do is to continue making 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 report 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 a positive credit history and improve your credit score over time.