The Late Payment Timeline


How Late Payments Terrorize Your Credit Score

If you are on a tight budget, it might seem impossible at times to pay your bills when they are due. With pay days not matching up with bill due dates, payments might seem impossible to make. You have to put food on the table and clothes on your children’s backs, after all. What you need to consider, though, are the effects these late payments are having on your credit score. If you are thinking of refinancing your home, getting a home equity loan or line of credit, or buying your first house, your credit score will need to be strong. Late payments do significant damage to your credit score and will make it difficult to get the loan you so desire. Here is a timeline of when your late payments affect your credit score, and how you can fix or stop the damage. SEE ALSO: Top 10 Days You Are Hurting Your Credit Score

After 30 Days

The main thing you should be worried about is having a delinquent payment after 30 days. After a 30 day grace period, the late payment is reported to the three credit bureaus. Your credit score will start to reflect the delinquency immediately. If you catch it early enough, then the damage will be minimal. However, this late payment can stay on your credit score for up to seven years, so try to catch any late payments before 30 days. Keep in mind: the more late payments that go over 30 days, the more it hurts your credit score. The credit bureaus and lenders see multiple late payments as a sign of irresponsibility and you will be penalized for having more than one.

After 60 Days

Any grace period you might have vanishes after 60 days and your credit score is damaged even more. At this time, the creditor reports your late payment to the credit bureaus again, this time with a note that the payment is 60 days overdue.

After 90 Days

This is where things really get messy. If a credit bureau receives notice that your payment is 90 days overdue, it can severely damage your credit score for up to seven years. Your credit will be severely affected because credit scoring systems are based on the statistical likelihood that you will allow a payment to go over 90 days overdue. After 90 days, that probability goes up to 100 percent, so all you can really do is call the company, try to explain your situation, and pay. Depending on the type of payment you are delinquent on, several records could also go against your credit score:
  • Collections: if a credit bureau finds out that your payment has been turned over to a collections department or third party collection agency, this will be noted in your credit report.
  • Tax liens: Though not directly related to late payments, a tax lien has a similar effect on your credit score as a late payment.
  • Repossessions and foreclosures: Experiencing a foreclosure on your home or having a car repossessed isn’t just traumatic; it also impacts your credit score, just like any other late payment. However, the bigger the late payment is, the more it will affect your score. So, these payments are extremely important.
SEE ALSO: The Foreclosure Timeline

After 120 Days

If you haven’t made your payment by this time, the company hands over your case to a third party collection agency. However, no additional harm is done to your credit score.

Resetting The Clock

In some cases, you might be able to convince a company to clear your name with the credit bureaus. For example, if it’s your first time getting a bill sent to collections, you might be able to get the company to clear it. But these instances are few and far between, so don’t wait to make the payment. With all the other things that you have to keep track of in your life, making payments for credit cards, mortgages, and car loans might not be at the top of your list. Keeping your expenses straight, though, is extremely important to having a good credit score.  
Date of original publication:
Updated on: November 10, 2015

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