Of all the financial tools and resources out there, the credit score has to be one of the least understood of them all. The complex scoring algorithm which takes into consideration factors like level of indebtedness, payment history, and even the types of debt that one has, is something that affects everyone.
And almost everyone makes at least one late payment on some kind of credit card or installment debt.
Most Late Payments are No Big Deal
Late payments do not begin to affect your credit score until the payment is more than 30 days late. At that point, the late payment is reported to the credit bureau and recorded as a 30-day late payment. There are also marks for 60- and 90-day late accounts, which are far more detrimental to your credit score than a 30-day late payment.
Once an account is 90 days late, it is considered in default. When accounts are in default, the credit bureau will show the delinquency on your report and your score may fall by as much as 100 points.
You should always be sure to note that paying late will result in a late fee charge on your account. However, if it is your first late fee, you can always ask the credit card company to waive the late charge on your account. Be sure to then set up automatic payments to ensure you are not late again. Being late on a payment more than once will undoubtedly bring about a late fee – one which can be as costly as $25 to $35 per incident.