Unfortunately, late credit card payments happen for a variety of reasons. If you’ve ever been late on a payment, you’ve probably seen your credit plummet. This is because your payment history is 35 percent of your FICO score.
The good news is that you can recover from a late payment if you work to get your finances and payments back on track. Read on for expert advice on how long it takes to recover from one of them, and how to fix—or at least mitigate—the damage a late credit card payment can do to your financial well-being.
How does late payment affect your credit report?
Lenders usually report late payments to credit bureaus when you are 30 days past due, which means you are not considered past due if you are only a few days past the deadline. In fact, if you catch a missed payment within a few days of the due date, you should pay it quickly (minimum or in full). If so, your lender will not report any negative activity to the credit bureaus.
A late payment usually remains on your credit report for seven years from the date of the delay. Late payments show up on your credit report as 30, 60, 90, 120, and 150 days past due. If you still haven’t paid the overdue amount after about 180 days or so, the issuer will probably write it off and turn it over to a collection agency, hurting your valuation even more.
Basically, if you make a late payment today, it will stay on your credit reports for up to seven years. This negative score will affect your credit report during this time, but the impact will gradually subside.
How much will a late payment damage your credit history?
Late payments can lower your credit score by 90-110 points. Also, the later you pay, the worse it affects your credit score – 60 days past due will affect your score more than 30 days past due.
While it may not seem like one late payment is such a big deal, it is important for lenders.
“The way you pay your bills gives potential lenders an idea of your sense of financial responsibility, and delay doesn’t exactly indicate a high degree of responsibility,” said Drew Chaneler, founder of personal finance website SimpleMoneyLyfe.
Chaneler also noted that late credit card payments affect those who already have excellent credit history more than those who are in the poor or fair category. Because sub-prime consumers tend to have a history of delinquent payments or other risky credit behavior, another mistake on their credit report won’t affect their score as much as it would on a person who doesn’t have a delinquent report.
How long does it take to recover from a late payment?
Even though a late payment remains on your credit report for seven years, you can take immediate action to remedy it.
If you miss a payment, even if it is not officially reported to the credit bureau as a late payment, your issuer may charge you a late payment fee of up to $41. If your payment is more than 60 days late, the issuer may also raise your interest rate to penalty interest rates, which are usually much higher than standard rates.
How long it takes to recover from a late credit card payment can depend on both your current credit situation and the value of any late fees, says accredited financial advisor Lauren Bringle Jackson of Self Financial, Inc.
“So if you already have a balance and are struggling to pay every month, adding more fees will certainly not help your financial well-being,” says Jackson. However, she added, it’s not all bad if you miss a payment.
If you have a long positive history with your card issuer and have never missed a payment before, you can waive the late payment fee. With regard to the APR penalty, you must make at least the minimum payment on time for six consecutive months to return to your standard APR.
“Just start making all of your payments on time each month immediately, but keep in mind that this approach will take time, which can range from a few months to a few years depending on your credit profile,” Jackson advised.
How can I remove late payments from my credit report?
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If you think you have a valid reason for delaying payment, such as you think your account was set up for automatic payment, or that you changed banks and your payment was accidentally forgotten during the transfer, you should try to contact your lender for this.
“In short,” says Charlie Scanlon, an attorney for Phoenix Credit Consultants, “if you have a good payment history, you bring it to the attention of creditors and ask them to ‘give you a break’ for your one-off supervision, which they may come up with if you have a good payment history and you’re good to ask.
Write a goodwill letter
You can also send a letter of recommendation to your issuer. The letter should include the account number, address, a brief explanation of why the payment was missed, how you plan to handle the loan responsibly in the future, as well as information that you need to remove the negative mark and from which credit bureau reports.
There’s no guarantee that a goodwill letter will work, but at least it won’t lower your score if it’s rejected.
“Keep in mind that it may be several weeks before your letter of goodwill is accepted or rejected,” says Nathan Wade, director of marketing for WealthFit.
Dispute inaccurate or old late payments
If one of your credit reports lists an incorrect or old late payment, you can file a dispute with this bureau by mail, phone or online. The credit bureau should investigate and determine if the information is inaccurate or old enough to be missing from your credit report. If yes, then it will be removed.
How to avoid late payments
If your check usually arrives a few days after the due date, making it difficult for you to pay on time, changing the due date (a common feature for most issuers) can help.
Credit card bills are usually due by 5:00 pm due date. However, if you are on the West Coast but your card issuer is on the East Coast, your bill may be paid sooner than you think. Be sure to check with your issuer and get these details up to date before the next due date. Some card issuers may set a later due date if you pay your bill online instead of by mail.
There are a few things you can do to avoid late payments:
- Sign up for auto pay.
- Set up reminders in your phone calendar or email.
- Make weekly payments instead of large monthly payments to stay on top of your balance.
If you know in advance that you will miss a card payment, contact your issuer as soon as possible. They can be lenient if you are late paying your bills for the first time. First of all, after paying off the overdue payment, you should resume timely, preferably in full, payments as soon as possible.
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The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.
