When creditors send information to credit bureaus, they use different status codes to indicate whether the account payment is current or late. There is no code for an account that is between one and 29 days past due. Creditors will use the “current” code during that period, so a late payment won’t show up, or affect your credit score, until the delay is past 30 days.
Creditors send updates to credit bureaus at different times, and there is no way of knowing exactly when the late payment status will appear. However, many creditors send updates monthly, so you can expect the late payment to show up on your credit report within a month or two.
What happens when I am late on a payment?
There are many reasons why payments are late, but the most important thing to know is that they will affect your credit if you go past 30 days, says Lauryn Williams, certified financial planner and founder of Worth Winning, a financial planning company. from Dallas, Texas. “If you’re only a couple days late, you can still keep your credit in good standing, but you may have to pay a late fee,” he says.
The impact of a late payment depends on the due date and the terms of your agreement with the company you owe money to. Creditors and lenders typically do not report payments less than 30 days late to the credit bureaus, but some lenders and creditors wait 60 days before reporting late payments.
As we’ve explained, your credit probably won’t suffer as long as you pay before 30 days, but you do have to pay in full, so a partial payment won’t prevent reporting to the bureaus.
Now, first of all, try to avoid falling into the habit of paying your bills late. Even if you’re just a few days late and it doesn’t affect your credit score, you could be hit with a late fee or sometimes a penalty interest rate from the creditor.
How long do late payments stay on the credit report?
Once a late payment is reported to the credit bureaus, it can stay on your report for seven years. It will hit your credit score the hardest when it first happens. But the older you are, the less the impact.
While you’re waiting for a late payment to clear from your credit report, you can find other ways to build your credit. For example, do your best to make payments on time and avoid overcharging your cards, which keeps your overall credit utilization low. Other strategies, like asking for a higher credit limit and paying more than the minimum amount each month, can also help.
What to do if you are late on a payment
Do not panic. The first thing you should do is pay what you owe, if possible. You can also contact your creditor to see if they’ve already reported it to the credit bureaus and discuss how to bring your account current if you can’t make the full payment on the spot.
In this order of ideas, if you do not pay, catch up as soon as you can. Let him or your creditors know that you are facing some problems, especially today with the coronavirus pandemic and what is happening with the economy.
Some creditors give borrowers a grace period, so you can gain a few extra days to make the payment without additional fees or penalties. But you can be charged a fee, a fine, or both, as soon as you miss the due date.
If you’re late but can pay the bill right away, talk to your creditor to see if you can get a waiver or refund of the late fee. Creditors have the right to deny your request, but may be willing to make an exception if you normally make payments on time.