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Do Payment Hurts Credit? – An Ultimate 2022 Guide

payment hurts credit tcp

Do Payment Hurts Credit? – An Ultimate Guide
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Late payment hurts credit scores as the payment history is the key factor in credit score evaluation. The timely repayment of loans and monthly payments have the effect of improving the borrower’s image from the lenders’ point of view.

According to an analysis by Ceic Data, the total loan of the United States is reported as 11,559.7 USD in 2022. To regulate this growing loan rate, assessing credit scores using loan repayments has become a crucial process. This article will talk about how late payment hurts credit scores. Keep reading to explore the worth of timely payments. 

When it comes to maintaining a good credit rating paying your bills on time is a must. However, what happens when a simple mistake is made and you forget to send in a payment by the due date? What if a financial emergency arises and you have to wait until the following payday to take care of a monthly bill? Will your overlooked or postponed payment undo all of your hard work and trash your credit scores?

Late Payment Hurts Credit

Late payments will have a major negative impact on your credit score. When it comes to loan approvals the lenders will expect some assurance that you will repay the loan amount. This is when the loan vendors start evaluating your creditworthiness. They will consider people’s previous credit history to track their discipline in paying off loans.

Most loan providers will check with the credit bureaus to evaluate people’s credit through credit scores. Though the credit bureaus have many parameters to calculate a person’s credit score, the payment history holds the major part of the credit score calculator. 

Effects of Late Payments

Delayed payments can bring enough trouble to the loan borrowers. They do not only have a drawback in credit scores, but they also increase our burden. Late payment hurts credit scores in two ways. 

Impact Your Credit Score

As we discussed, the payment history holds more than 35% of your FICO score. Among all the parameters that are considered, this late payment hurts credit in huge numbers. When your credit score falls, your eligibility for loan approvals is also decreasing in considerable numbers. 

Too Much Load

The other important factor is that late payments can easily dump you with a heavy burden. Smaller targets are easier to achieve. This is the way people can pay off the smaller parts of the whole amount and make it easier for them. What if they postpone the payments and end up paying the whole amount? Even if people do not have any time constraints, it is better to make payments regularly. Or else, this will result in getting into debt. 

How Late You Can Be?

The mention of late payment hurts credit and can leave you with the question “what is considered late”? or “what is the deadline”? These questions do not have a defined answer. It depends on the scenarios. The credit bureaus on whom the loan vendors depend have a defined time limit and the loan vendors do not have one. It depends on person to person. 

When a Payment Hurts Credit According to Credit Bureaus?

What your lender considers to be a late payment and what the credit bureaus consider to be a late payment are not the same. This could potentially be good news if you find yourself in a situation where you have forgotten to make a payment by the due date. You might wind up owing a late fee on a slightly late payment, but the account will not necessarily be reported as past due to the credit bureaus.

You may be worried that your lender will report you as late to the credit bureaus (Equifax, TransUnion, and Experian) if you are even a single day past due with your payment. Yet in reality, being 1 day late, 3 weeks or even 29 days late should have no negative impact on your credit whatsoever. Unless you are a full 30 days late with your monthly payment then the delinquency should never show up on your credit reports.

The credit bureaus do not allow lenders to report accounts as late unless a payment is 30 days or more past the due date. If a lender reports you as late when you are not a full 30 days beyond your due date then it is a violation of the Fair Credit Reporting Act (FCRA) because the lender is reporting incorrect information. A creditor cannot tell the credit bureaus that an account is 30 days late when, for example, the payment is only 10 days late. Incorrect information such as this can be disputed with the credit bureaus – either on your own or with the help of a professional.

When a Payment Hurts Credit According to Lenders

It is worth noting that just because a late payment is not going to be reported to the credit bureaus yet that does not mean that your lender will not assess a late fee on your account. With some lenders and credit card issuers when you are even a single day past your due date a late fee may be added to your account. Mortgage lenders will generally have a 5-day grace period before a late fee is assessed (though you should verify this fact with your mortgage provider).

Bills Which Do Not Appear On Your Credit Reports

If you are overextended financially and wondering how late a bill can be before it damages your credit keep in mind that juggling bills can be a slippery slope. Your best bet is to try to both reduce your spending and, if possible, increase your income as quickly as possible to get out of this cycle before your credit scores take a hit.

However, if you are temporarily experiencing a reduction in income, an illness, or going through hard times due to another reason keep in mind that certain bills generally will not show up on your credit reports at all unless the account goes into default. For example, monthly utility bills such as gas, water, cable, electricity, and your mobile phone probably will not appear on your credit reports.

If you have to make the unpleasant choice of which bill to pay this week and which bill to pay later you might want to focus on keeping the accounts that do appear on your credit reports on time. Remember, however, if a utility account gets handed over to a collection agency then the account can still show up on your credit reports and would most likely hurt your credit scores at that point.

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Frequently Asked Questions

Does late payment hurts your credit score?

Yes, late payments have a major impact on credit score as the credit score calculation has the payment history of the people as the major criteria. Even if the loan providers are not considering the credit score, your previous loan payments will have an influence on their minds about your credibility. 

When can a loan vendor report borrowers be late in payments?

As per Fair Credit Reporting Act, loan vendors can mark the borrowers as late only when they exceed one month of due time.

What is late according to the loan vendors and credit bureaus?

The fact that delayed payment hurts credit score is sure. But they vary with respect to other factors. Credit bureaus will consider a payment as late when it exceeds one month. Whereas the loan vendors can even consider a one-day delay. It depends on the individual loan providers.


Every credit user must track their credit scores and beware of the factors that can impact their credit scores. If you are a loan borrower looking for a loan option, you must make sure your previous credit history is good enough to get approved for loan applications. Even if you do not need a loan shortly, keep in mind that today’s regular payments can impact your credit score and help you in time. People who ignore timely payments will realize that late payment hurts credit score. People with less credit knowledge can look for credit repair agencies like TheCreditPros to assist in boosting their credit scores. Check out their attractive price packages and contact us for more information. 

Contact – (800) 411-3050

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