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Missed a credit card payment? If so, you could be looking at some repercussions if you don’t make good on your payments right away.

Most importantly, your credit score could take a hit if you are late on your bill payments. And if you make missing payments a ritual, your credit score can really be damaged, requiring more effort to bring it back up to par.

With a damaged credit score, you could find it difficult to get approved for loans and other credit products. Not only that, you might find it tough to get an apartment, land a job, or even secure a cell phone contract.

So, what effects do missed payments have on your credit score and pocketbook? Let’s take a closer look.

Key Takeaways

  • Generally speaking, late payments are reported to the credit bureaus 30 days after the due date.
  • Payments that are less than 30 days late may incur late penalty fees and interest charges, but your credit score shouldn’t suffer.

Will A Missed Payment Affect Your Credit Score?

The effect that a missed payment has on your credit score depends on how late the payment is and what your credit score currently is. The later the payment, the worse effect it will have on your credit score. Further, a higher credit score will take a bigger hit than a lower credit score because the latter has already been impacted by past negative financial activity.

What Happens If You Miss A Payment That Is Less Than 30 Days Late?

Payments that are less than 30 days late may incur late penalty fees and interest charges, but your credit score shouldn’t suffer. 

Credit bureaus are usually informed of late payments that are 30 days late or more. So, if you are only a day or two late on making your credit card bill payment, your credit score may not be affected.

What Happens If You Miss A Payment That Is More Than 30 Days Late?

If you are at least 30 days late in making a payment, the creditor will likely report this information to the credit bureaus, and your credit report will be updated with a note about your late payments. 

This note can remain on your credit report for as long as seven years.

What Happens If You Miss A Payment That Is More Than 60 Days Late?

Also mentioned earlier, the longer the payment is overdue, the worse the impact on your credit score. That means a 60-day late payment is worse than a 30-day late payment. And of course, payments that are 90 days late or more are even worse.

What Happens If You Miss A Payment That Is More Than 90 Days Late? 

So, if your credit score is currently high, you’ll notice a bigger impact than if your score was already brought down in the past due to irresponsible payment activity. And if your payments are over 90 days late, for instance, your score would be pulled down further than if the payments were 30 days late.

Your credit score is calculated based on many factors, but your payment history carries the most weight. More specifically, 35% of your credit score is based on your past payment behaviour, so it’s easy to see how late payments can have such a big impact on your credit score.

Common Consequences Of Missed Payments

If you are late on a payment or miss paying it altogether, you can expect a negative impact on various fronts, including the following:

  • Late penalty fee charged. If your bill is paid late, you may be charged a late fee. Even if your bill is paid a day or two after it was due, you may incur late charges, which you will see on your next statement. 
  • Increase in interest rate. If you are regularly late on your bill payments, your creditor may penalize you with a higher interest rate than what you are paying right now. For credit cards, a penalty APR can be as high as 29.99%. 
  • Lose your promotional interest rate. If you were taking advantage of a 0% APR as a promotional incentive when you first signed up with your credit card provider, you may lose that and wind up with a significantly higher interest rate.
  • Notes on your credit report. Late payments will be reported to the credit bureaus, which will stay on your credit report for up to seven years. 
  • Lower credit score. Your credit score can be negatively affected by missed or late payments. Your payment history is one of the most important factors that influences your credit score, so missing payments can have a big impact on it.

Are Partial Payments Considered Late Or Missed? 

It’s always best to pay your bills on time and in full every billing cycle. If the payment is overdue by at least 30 days, your lender will consider it missed. But depending on the type of credit account you’re paying, a partial payment may be enough to avoid a late or missed payment. 

Loans 

Partial payments on a typical loan — such as a car loan, personal loan, or mortgage — will be considered missed or late. Only full payment amounts are accepted for loans. 

Credit Cards

These types of credit accounts are unique in a few ways, including the fact that minimum payments are allowed. Every billing cycle, you’ll receive a credit card bill stating when your payment is due, how much your statement billing amount is, and the minimum payment accepted to avoid a late payment. 

That means you can make a payment far less than the full credit card bill and still ensure an on-time payment. However, the balance you carry forward will be charged interest, which can get expensive if you have a habit of only making minimum payments every month. 

What Can You Do If You Missed A Payment?

If you’ve missed a bill payment, time is of the essence to take action to minimize the effect on your credit score and reduce any late fee penalties you may be charged:

Pay the bill immediately. The first thing you should do when you miss a bill payment is to pay it right away. Even if you are only able to make the minimum payment (in the case of a credit card bill), it will still count as a payment made. This is important when trying to protect your credit score from being damaged.

Reset your interest rate. If you experienced an increase in your interest rate as a result of late payment, your credit card issuer can reset your rate back to what it was before your penalty if you can make timely payments for a certain number of months. That’s why getting back on track is so important.

Can You Remove A Late Payment From Your Credit Report? 

It’s possible to have a late or missed payment removed from your credit report, but only if it was noted in error. If you legitimately missed a bill payment, this will be noted on your report and you won’t be able to remove it. 

However, if you feel that a note on your credit report was made in error, you can dispute it with TransUnion or Equifax. You will need to provide proof that the late payment was reported in error, such as a bank statement showing that the payment was debited from your account. 

This is just one of the reasons why it’s important to get a copy of your credit report and check your credit scores regularly. If there are any inaccuracies on your report, such as a missed payment reported in error, your credit score could be unfairly affected. By reviewing your report, you have a chance to spot any errors and have them rectified right away. 

What Can I Do To Avoid Missing Payments?

Sometimes, consumers miss bill payments because they are simply unable to pay up when the bills come due. Whether it’s because of overspending, loss of a job or income, or any other situation that has impacted a person’s finances, this can result in a situation in which consumers are financially incapable of making timely payments in full.

Set Up Automatic Payments

You may find it helpful to set up automatic payments and reminders. Automatic payments to pay your bills by their due date can help you ensure that you’re never late paying your bills because of a lapse in memory. 

You can set up your accounts so that when the due date arrives, the funds from your bank account are withdrawn to fulfill payment obligations. 

If you’re worried about overdraft fees, you also have an option to automatically pay the minimum amount required instead. Then, you can pay the remainder online at a later date to catch up. This way, you’ll never be late for a payment.

Set Up Alerts

You can set up text or email alerts that will notify you when your bills are coming due. Ideally, they should be set to go off a few days before the due date to give you enough time to make your payments.

Final Thoughts On Missed Payment And Your Credit Score

Late payments that are at least a month overdue can put you in a predicament. Not only could you be slapped with a penalty fee, but your credit score can also be negatively impacted. While there are things you can do to help mitigate the situation after the fact, your best bet is to develop responsible payment habits to keep your credit score safe.

Missed Payments FAQs

How long do missed payments stay on your credit report?

Late or missed payments will stay on your credit report for up to six years from the date it was reported, even if you eventually make up for the overdue payments.

What can I do if I can’t keep up with my payments?

If you’re struggling to keep up with your bills and manage your debt, you should reach out to a credit counsellor. These professionals can help you with the following:
  • Come up with a budget to better manage your finances
  • Establish a debt management plan to help you eliminate your debt
  • Suggest products or processes like a debt consolidation loan, consumer proposal, or bankruptcy

When do late payments get reported to the credit bureau?

Generally speaking, late payments are reported to the credit bureaus 30 days after the due date, though some lenders may wait as long as 60 days. That means you may be able to avoid having your missed payment noted on your credit report if you make up for the payment before this 30- or 60-day window.
Lisa Rennie avatar on Loans Canada
Lisa Rennie

Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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