Credit Q&A: Will a Late Payment Hurt My Credit Score?

Q: How late do I have to be on a bill to hurt my credit score? For example, if I was two days late paying my student loan, how will that affect my score?

A: If the lender notifies the credit bureaus – Experian, Equifax or TranUnion – during the window of time in which the payment is late, your credit score will suffer. 

There are no rules saying when a lender can (or can’t) report your tardiness, but most lenders wait until a payment is thirty days late to do so.

“If your payment is due on March 10 and it’s not paid by April 10, [an issuer] is likely to report you,” says Craig Watts, director of public affairs for FICO, the company behind America’s current credit scoring model. “If you manage to pay by March 25, it’s likely that they won’t.”

Watts says lenders tend to be lenient or aggressive depending on your payment history. So someone who’s never made a late payment could get a 60-day grace period, while someone with a spotty record could get much less than the 30-day industry standard.

So what happens to your credit score if even a short delinquency is reported? 

If you’re in the credit elite – those with a score between 760 and 850 – your score will take a significant ding. 

“You can expect it to drop down to the mid-600s,” John Ulzheimer, president of consumer education for SmartCredit.com, says. He adds that you’ll have to live with that delinquency for about thirty days until the cycle repeats itself and the creditor reports that the bill has in fact been paid.

If your score’s already in the dumps, it won’t suffer that much. However, the late payment will prolong its recovery.

“It hits the brand new delinquency line on your credit report and locks in the lower score,” Ulzheimer says, before adding that rebuilding your score ultimately hinges on the moves you make, and tends to last longer than the 30-day recovery period of those with better credit. 

Want to know what affects your credit score? E-mail your questions to MainStreet at editors@mainstreet.com!

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