You likely know that a late payment can hurt your credit score. But what if you’re just a few days late? Does a 7-day late payment affect your credit score?
Let’s review how a missed payment affects your credit score to separate fact from fiction.
When do late payments show up on credit reports?
Late payments can negatively affect your credit score, but if your payment is just a couple of days late, let’s ease some of that worry.
Creditors don’t report late payments to the credit bureaus (Experian, Equifax, and TransUnion) until they’re at least 30 days overdue.¹ This means if you’re just a few days late, your credit score won’t suffer.
While that’s good for your credit score, you should still try to avoid late payments. There really aren’t any acceptable reasons for late payments on your credit report in the eyes of the credit bureaus.
Other consequences of late payments
Late payments can have repercussions beyond damage to your credit.
- Late fees: Your lender can charge a late fee, even if your payment is just one day late.²
- Penalty APRs: For payments 60 days or more overdue, credit card issuers can also apply a penalty annual percentage rate (APR) to the existing balance on your card. The typical penalty APR on a credit card is usually between 25% and 30%.³
- Closed accounts: If you miss several payments, the lender may send your debt to collection — further damaging your credit score — and close your account.
Always communicate with your creditor if you know you’ll be late. Some may offer a grace period or other options to avoid late fees, damage to your credit report, and other consequences.
How do I detect late payments on my credit report?
Are you worried about late payments on your credit report? Here’s how you can keep an eye on your credit history.
Start by regularly reviewing your credit reports from the three major bureaus. You’re entitled to one free report per year from each major credit bureau. You can order your reports at AnnualCreditReport.com.
Once you have your credit report, look for any missed payments or other errors that could negatively impact your score.
When checking your report, focus on the “potentially negative items” section. This area shows any missed payments and how late they were.
Your credit report notes the number of days the payment was past due in 30-day increments. The longer you take to make the payment, the more severe the consequences. Accounts marked as 60, 90, or more days late significantly affect your credit score.
Monitoring your credit score can also help you spot issues early. Some financial institutions and credit monitoring services offer alerts for significant changes, including new late payments.
You can’t remove an accurate late payment from your credit report, but you can have it removed if it was reported in error by filing a dispute with the credit bureau that reported the error.
How companies dispute errors
Each company has its own process for disputing errors:
If the late payment appears on more than one credit report, you’ll need to file a separate dispute with each agency.
Once you file the dispute, the credit bureau will investigate your case and may request copies of any documentation you have supporting your position.
If the credit bureau confirms the creditor reported the late payment in error, it will remove the negative mark from your credit report, and your credit score should rebound.
Consequences of late payments on your credit score
How a late payment affects your credit score depends on how late it was and your overall credit history.
One late payment will generally hurt your credit score less if you have a low credit score. While that might seem counterintuitive, if you have a history of missing payments, missing another payment isn’t much of a surprise to the credit bureaus, and your low credit score already accounts for this possibility.
However, if you have excellent credit and never miss payments, the credit bureaus might see a late payment as a sign that your financial situation has changed, and you may experience a more significant score drop.
For example, a 30-day missed payment can drop a Fair credit score (a FICO score of 580 to 669) anywhere from 17 to 37 points, according to FICO. On the other hand, a borrower starting with a Very Good credit score (740 to 799) could see their missed payment credit score drop by 63 to 83 points.⁴
How long do late payments stay on a credit report?
This negative mark stays on your report for up to seven years and can affect your credit score the entire time, although the effect tends to lessen over time.
Staying on top of your payments can help you avoid these consequences.
How to handle a missed payment
If you’ve missed a payment, don’t panic. Here are some steps you can take to minimize the damage:
- Make the payment as soon as possible. Pay at least the minimum right away to minimize the impact on your credit score and avoid a potential increase to your APR.
- Reach out to the lender. Communicate with your creditor to explain your situation and discuss possible solutions. Your lender might be willing to waive the late fee. If you’re facing financial difficulties, you can discuss a hardship program or a temporary payment deferment options.
- Review your budget. Adjust your budget if you recently experienced a drop in income or increased expenses.
- Set up autopay. Automate your payments to ensure you pay at least the minimum payment on time each month in the future. If you don’t want to use automatic payments, use reminders and alerts to keep track of due dates.
Take proactive steps to manage your finances
Late payments can affect your credit score and cost you late fees and penalty APRs. But they’re often avoidable. Set up automatic payments or payment reminders, communicate with your creditors if you’re having financial troubles, and monitor your credit report to avoid errors.
If you want to learn more about protecting your credit, read our guide to maintaining a good credit score.