How Can a Late Payment Affect Your Credit Report?

According to a recent survey, about 40 million Americans miss at least one credit card payment every year. Some do it because they forget to pay, while others do it simply because they can’t afford to pay what they owe.

If you’re on the verge of making a late payment to a creditor, you might be wondering how it’s going to affect your credit report. Although, there are many factors that hurt your credit score, but late payments could very well take a huge toll on it if you’re not careful.

To drive this point home, let’s take a closer look at how a single missed payment can affect your credit report. Here is what you can expect to happen.

Most Creditors Report a Late Payment After 30 Days

There is some good news for those who think they’re going to be forced to make a late payment on a bill this month. Most creditors aren’t going to report your payment as late until 30 days after the due date.

You might face extra fees from a creditor if you make a payment between one day and 29 days late. But until you reach the 30-day mark, you shouldn’t have to worry about a late payment affecting your credit report.

Once 30 days come and go, though, a creditor will reach out to the credit bureaus to notify them of your non-payment. They’ll also continue to reach out every 30 days after that if you keep missing payments. Each subsequent payment you make late will be added to your credit report accordingly.

It Can Bring Your Credit Score Down

A late payment to a creditor will serve as more than just a blemish on your credit report. It’ll also have an impact on your credit score in most cases.

There are a number of factors that go into determining your credit score, but your payment history is one of the most important. It accounts for about 35% of your credit score.

A late payment will hurt your payment history and make you look like an irresponsible borrower. It’ll drag your credit score down by as much as 100 points and continue to drag it down further until you get current with your payments to a creditor.

It Can Haunt You for Years

If a late payment shows up on your credit report, you might not be too concerned about it as long as you get your account current fast. But it could plague for you many years to come.

Once a late payment appears on your credit report, it’ll often take 7 years for it to fall off. You may be able to negotiate with a creditor to remove it, but this can be difficult to do.

The good thing is that, over time, a late payment will have less and less of an impact on your credit report and credit score. But you should always remember that a single missed payment could linger for way longer than you want it to and hurt you for years to come.

This should be reason enough for you to work hard to avoid late payments at all costs.

Steer Clear of Making Late Payments Whenever Possible

Late payments have, unfortunately, become a way of life for many Americans. A sizable percentage of the population has gotten into the habit of paying bills late month after month.

If you’ve fallen into this trap, do what you can to get out of it. Taking out a personal loan could be a great way to give yourself some breathing room when it comes to paying bills on time.

Whatever you choose to do be sure not to accumulate a single late payment since it can affect your credit report in a huge way.

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