FINANCIAL

It Pays To Be On Time: How Late Payments Ruin Your Credit Score, Finances

By Michelle Black
Bankrate.com

WWR Article Summary (tl;dr) Once your payment passes the 30-day late mark all bets are off and damage to your credit becomes a very real possibility.

Bankrate.com

Discovering that you accidentally missed a payment due date on a credit card or loan can be an unsettling feeling.

Your lender might charge you a late fee for the oversight and even worse, it may negatively affect your credit scores.

Here’s the good news: Your payment has to be a full 30 days late before a lender can report it to the credit bureaus. This means if your payment is made a few days or even a few weeks past the due date, it isn’t going to harm your credit scores (though you might still face consequences from your lender).

Once your payment passes the 30-day late mark, however, all bets are off and damage to your credit becomes a very real possibility.

There’s no question that the payment history on your credit reports is important. In FICO brand scoring models, payment history is worth 35 percent of your credit score.

Yet a late payment, or any other negative blemish on your credit reports, isn’t worth a specific number of points.

You won’t, for example, automatically lose 15 points from your score when a 30-day late payment is added to your report. (FICO scores range from 300 to 850.) The credit scoring process is a lot more complicated than that.

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