If you’re struggling to make ends meet, a question you may have is “How many points will my credit score drop if I make a late payment?” One late payment of 30 days or more can cause significant damage to your credit score, and it will remain on your credit report for seven years. If you make a late payment, you may notice a drop in your credit score of 100 points or more. If your payment is more than 60 or 90 days late, the drop in your credit score may be even higher.
Factors That Impact Your Credit Score
Your credit score is used by potential lenders to determine how much of a risk it would be to their company if they decide to loan money to you. It’s calculated using a combination of factors including payment history, length of credit history, credit mix, credit utilization, and recent inquiries. All of these factors are important, but the factor that usually carries the most weight is your payment history, which is why just one late payment can seriously hurt your credit score.
What About Paying a Few Days Late?
A past-due payment won’t be reported to the credit bureau unless you’re at least 30 days past due. If you have a cash flow problem and pay your bill a week or two late, it shouldn’t impact your credit. Depending on the terms of your credit card or loan, a late charge may be assessed. You may or may not have a grace period of up to 10 days on a mortgage or loan to make your payment before a late charge is assessed. Credit cards don’t usually have grace periods, and you may be hit with a late charge right away.
Remembering to Make Payments on Time
How can you be sure you’ll always make payments on time and not simply forget? The easiest way to avoid late payments is to sign up for an automatic draft, which ensures that your payment is drafted from your checking account or savings account when it’s due. Another option is to sign up for notifications from your lender, which means you’d receive an email or text reminding you that it’s time to make a payment. You can also set a reminder on your phone or add due dates to your personal calendar
Protecting Your Credit Score
Since credit missteps can impact you for many years to come, it’s important to be proactive about paying your bills on time and make sure to not take on more debt than you can afford to pay back. It’s a good idea to make sure your accounts are reporting correctly to the credit bureaus and that payments are not being reported as late when you’ve made your payments on time.
Correcting Errors on Your Credit Report
Whenever you find an error on your credit report, dispute it immediately. To make this process as easy as it can be, consider working with Dovly, an automated credit repair engine. We can help you take care of working with credit bureaus to have errors removed, and we can continue to monitor your credit 24/7. Contact Dovly today.