How to Minimize Credit Damage From Late Payments

On-time payments are the biggest factor affecting your credit score, so missing a payment can sting. If you have otherwise spotless credit, a payment that's more than 30 days past due can knock as many as 100 points off your credit score. If your score is already low, it won’t hurt it as much but can still do damage.

But sometimes it's impossible to pay on time, because of job loss or another financial crisis. If you're in a tight spot, look into help and strategies for when you can't pay all your bills.

When is a payment marked late on credit reports?

A payment will typically need to be 30 days late before it's reported to the credit reporting bureaus. An overlooked bill won't hurt your credit as long as you pay before that 30-day mark, although you may have to pay a late fee.

What's on your credit reports is important because that's the data used in calculating your credit scores. Since payment history is the biggest element in what makes up your credit scores, going 30 days or more past due can really hurt.

How do I know there's a late payment on my credit report?

If your creditor sends you a late payment notice or charges you a late fee, check all three of your credit reports. You’re entitled to free weekly credit reports from the three major credit reporting bureaus: Experian, Equifax and TransUnion. Request them by using AnnualCreditReport.com.

If you have an account with payment modifications, check to make sure they're being reported correctly.

You can also keep an eye on your account activity with a personal finance website. With NerdWallet, you can check your free credit report and your VantageScore credit score whenever you like.

What can I do if I make a late payment?

If you're less than 30 days late

You probably were charged a late payment fee and perhaps a higher APR, but your credit won't suffer as long as you pay before the 30-day mark. If you’ve never or rarely been late, call the creditor and ask if it will forgive the fee.

If you're more than 30 days late

Bring your account current as soon as possible. Thirty days late is bad, but it’s not as bad as 60, which is not as bad as 90. The sooner you can catch up, the less damage to your credit.

When your account is current, you can contact the creditor or write a goodwill letter asking it to remove the negative mark. Explain what led to the oversight and note that you've paid up now. If you have a long track record of on-time payments, it might help to note this is a rare slip-up.

If it's an error

Credit reports sometimes include mistakes. If you spot incorrect information like a payment marked late when it wasn't, dispute the error to ask the credit bureau or the creditor involved to take it off your credit reports.

How long does a late payment stay on my credit report?

It can stay on your credit report for 7 years from when the account was initially reported delinquent (30 or more days past due). However, the impact on your credit fades with time.

Will making a partial payment keep me from being reported late?

Unfortunately, no. It can feel like a good-faith effort to send at least something when you can’t afford the minimum payment or a regular bill. But partial payments won't let you avoid being reported late and perhaps sent to collections.

How can I avoid late payments?

Focus on preventing problems with these strategies:

• Many credit card issuers allow you to select payment due dates. You may want to stagger due dates to work with your paydays or bunch them up to help you remember.

• Set up text alerts or calendar reminders about bills due in a few days. If you need more than one, set up multiple electronic nudges.

• If you can do so without risking overdrafts, consider using automatic payments to pay at least the minimum as soon as a statement issues. You can go online later to pay more, but this way your account is never late.

• Consider making payments on your credit cards throughout the month. Paying down the balance every week or so protects your credit two ways: You've already paid by the time the due date hits. And keeping your balance low relative to your credit limit improves your credit utilization, which is the second-biggest influence on your score.