Can One Late Payment Affect My Credit Score?

Even if you normally pay your bills on time, an unexpected financial emergency, a lost job, or even a simple oversight could cause you to fall behind on your payments.

If you miss a payment on one of your credit accounts, be it a credit card, mortgage, or other loan, you could see your credit score drop. As a result, lenders may view you less favorably.

Lenders use the information on your credit report to gauge your risk as a borrower, and your payment history has the strongest impact on your credit score. While a history of on-time payments suggests you are a consumer who will likely repay your debt on time, a history of late payments could suggest to creditors that you are a risky borrower.

If you have a payment that is more than 30 days late, your creditor may report it to the credit reporting agencies (CRAs). In this case, the late payment can show up on your credit report and be factored into your credit score. Late payments will be listed on your credit report depending on how late they are: 30 days late, 60 days late, 90 days late, 120 days late, 150 days late, or charged off.

But how much of an effect does one late payment really have on my credit score?

The degree to which a late payment may affect your credit score can depend on multiple factors. When it comes to your FICO credit score, for example, a late payment will be evaluated based on how severe it is, how recent it is, and how frequently you’ve paid late.

Each credit reporting agency has its own model for evaluating your information and assigning you a credit score, so your scores will vary between the agencies. You should also know that your credit scores are updated each time there is a request for a score, and new information received impacts the model.

In general, though, the longer a bill goes unpaid, the more damaging the effect it has on your credit score. For example, all other things being equal, a payment that is 90 days late can have a more significant negative impact on your credit score than a payment that is 30 days late. In addition, the more recent the late payment, the more negative of an impact it could have.

One late payment could have a more significant impact on higher credit scores. According to FICO data, a 30-day delinquency could cause as much as a 90- to 110-point drop on a FICO Score of 780 for a consumer who has never missed a payment on any credit account.

In comparison, a consumer with a 680 FICO Score and two late payments (a 90-day delinquency on a credit card account from two years ago and a 30-day delinquency on an auto loan from a year ago) would experience a 60- to 80-point drop after being hit with another 30-day delinquency.

If you miss a payment (even just one) on one of your credit accounts, the late payment could remain on your credit report for up to seven years. If you fall in the habit of paying late, your account could be charged off or sent to collections, which could further dent your credit score.

In addition to lowering your credit score, a late payment could also cost you in the form of late fees and higher interest rates. If you pay your credit card bill even one day late, for example, you could be charged a late fee. Your creditors may also raise your interest rate if you regularly miss payments, which would mean you’d have to pay more money in order to carry a balance.

I’ve missed a payment. What should I do now?

If you do have unpaid bills, consider taking these five steps take to help you gradually improve your creditworthiness over time:

1. Make a budget in order to pay off bills as soon as possible. Because a late payment can cause more damage to your credit score the longer it goes unpaid, the sooner you can pay it off, the better.

2. Continue on-time payments on your accounts that are paid as agreed. If you find yourself late on one of your credit accounts, stay current with all of your other accounts.

3. Consider automatic payments or electronic reminders. This can be particularly helpful if paying your bills tends to slip your mind. You can also set email or text message reminders to help you stay current with your accounts.

4. Contact your creditors to work out a payment plan. If you know you are going to be late on one of your accounts, a payment plan may help you avoid a blemish on your credit report.

5. Regularly monitor your credit report. By doing so, you can keep tabs on your payment history and ensure that late payments fall off of your credit report after the appropriate amount of time has elapsed. If you want to see how certain credit actions, such as late payments, could affect your credit score, consider enrolling in an Equifax credit monitoring product in order to access Equifax’s Interactive Score Simulator.