How Long Do Missed Payments Affect Credit Score?

If you’ve missed a payments on your credit card, a car loan, student loan, or mortgage, and a late payments was reported on your credit report, you might be wondering how long does a missed payment affect your credit score for? We will answer this question in much detail below.

How Long Do Missed Payments Affect Credit Score?

Missed payments affect your credit score for a minimum of 12 months to 18 months. Missed payments remain on your credit report for 7 years from the date you missed your payment. After 7 years, the late payment will automatically be removed from your credit report. As the late payment mark ages, its effect on your credit score lessens until it’s ultimately removed from your credit report.

Typically, missed payments are only reported as late to the credit bureaus after the payment is 30+ late. Payments that are more than 30 days late result in a 30 day missed payment mark being added to your credit report.

A missed payment has the biggest effect on your credit score when it’s first reported on your credit report. As the missed payment ages, its impact on your credit score will lessen until it’s ultimately removed from your credit report after 7 years.

The exact number of points your credit score will drop as a result of a late payment depends on what is in your credit report. Typically, the higher your credit score, the bigger the drop will be. Persons who already have negative items bringing down their credit score may notice a lower drop in their credit score because it’s already being dragged down by other negative items.

Furthermore, the affect on your credit score depends on whether your missed payment led to other negative items being added to your credit report.

For example, if you have several missed payments and your account was sold to a collection agency, the collection agency may added a collection account to your credit report further bringing down your credit score.

Another example would be missing a payment on your car loan. If you miss several payments, your vehicle may be repossessed, causing a repossession to appear on your credit report, affecting your credit score negatively and bringing it down significantly.

So the effect that a missed payment may depend not only on the late payment that’s reported to the credit bureaus but also on the series of events that may follow a missed payment.

When Does a Missed Payment Affect Your Credit Score?

A missed payment typically affects your credit score when it’s reported on your credit report. Missed payments are reported to the credit bureaus after the payment is 30+ days late. After your payment is 30 or more days late, the lender updates your account status as 30 days late, prompting the credit reporting bureaus to add a 30-day late payment notation to your account.

Even if you make your payment after the 30-day late payment notation is added to your credit report, the 30-day late payment notation will remain on your credit report for 7 years from the date you missed your payment. After the 7 year period, the late payment will be removed from your credit report. Late payments have the biggest effect on your credit score when they’re first added. As the late payment ages, its impact on your credit score lessens.

Furthermore, if you fail to make subsequent payments, a 60-day late payment, a 90-day late payment, and 120-day late payment notations will be added to your credit report. So, as the delinquency increases, the negative impact on your credit score increases as more late payment notations are added.

So, if you’ve missed a payment, the best course of action to improve your credit score and prevent further damage is to continue making payments if you can afford to do so. This prevents further damage to your credit.

How Can You Know If a Missed Payment is Affecting Your Credit Score?

You can figure out whether a missed payment is affecting your credit score by reviewing a copy of your credit report. You can review a copy of your credit report online by using many of the free and paid services out there for checking your credit. A simple Google search for checking your credit report will reveal dozens of free and paid sites for you to choose from.

Once you’ve obtain a copy of your credit report, go to the accounts section and look at the payment history of each and every account that you have. If all payments are marked with a paid notation or green color, this means that you’ve made your payment on time. However, if there is a 30 day late payment notation, this means that your account has a missed payment and is therefore marked as being late.

Keep in mind, a single missed payment that is 30+ day late can affect your credit score, significantly bringing it down, especially if you had a high credit score before the late payment. The higher your credit score, the bigger the drop will be from a late payment.

What Should You Do If You’ve Missed a Payment On Your Credit Card, Loan, or Mortgage?

If you’ve missed a payment on your credit card, car loan, or mortgage, you have 30 days from the due date to make your payment without a late notation being added to your credit report. This is so because payments are only reported as late after 30 days of missing your payment. So, if it has been less than 30 days, you should try to make the payment even if it’s late as this will prevent it from being reported as late on your credit report.

If you’re 30 or more days late on your payment, your lender or creditor is likely to report the payment as 30 days late, adding a 30-day late payment mark to your credit report. If you’ve missed a payment, you should try to make your remaining payments on time to avoid additional late payment marks from being added to your credit report. Making your payment will help you avoid additional damage to your credit.

Does Making a Partial Payment Affect Your Credit Score?

Unfortunately, making a partial payment that’s less than the minimum amount due will affect your credit score as your account will still be reported as being late. This is so because you’re legally obligated to make a payment in the full amount, anything less will cause your account as being marked late, lowering your credit score.

How to Avoid Missing Your Payments?

  1. Alerts – Set up alerts to alert you as to when your payment is due. This will prevent you from forgetting that your payment is due.

  2. Due Dates – Contact your card issuer or lender and ask them to change your due dates to align with your paycheck. This will ensure that you have money to make the payment at the time that it’s due.

  3. Automatic Payments – Setting up automatic payments can be a great way to ensure that your credit cards and loans are paid on time. That said, you should be careful when setting up automatic payments, this is so because if you do not have sufficient funds in your account, your account may be overdrawn, resulting in overdraft fees.

Frequently Asked Questions (FAQs)

1. How long does 1 missed payment affect credit score for?

A single missed payment will affect your credit score 12 to 18 months. As the late payment ages, its impact on your credit score lessens until it’s ultimately removed from your credit report.

2. Can I get a late payment removed from my credit report?

You cannot get a valid, accurate late payment removed from your credit report. However, if there is a late payment that is inaccurate, you can file a dispute with credit bureaus to have it removed from your credit report.

3. How long does it take to improve credit score after a late payment?

It takes 12 to 18 months for your credit score to recover from a missed or late payment. As the late payment ages, its effect on your credit score will lessen until it’s removed from your credit report after 7 years.

4. How to fix my credit score after a late payment?

You can fix and improve your credit score after a late payment by making all of your payments on time, reducing your balances, refraining from applying for new credit, and keeping your old accounts open.