Here’s What Happens When You Have Poor Credit and Are Late With a Payment

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Paying bills late can harm your credit score, no matter what. But read on to see what might happen if you’re late with a bill when your credit isn’t in the best shape. 

When you sign a loan, you’re committing to making your monthly payments on schedule. And when you borrow via a balance on your credit card, you must make your minimum payments on time every month.

When you’re late with a loan payment or credit card bill, generally, not much will happen from a credit score perspective until you’re 30 days late. Lenders and credit card companies generally won’t report delinquencies after five or seven days because sometimes, things happen.

But if you’re 30 days late or more, you can expect the credit bureaus to be notified of your delinquency. From there, your credit score might take a dive. But believe it or not, the hit may not be so severe if you have poor credit to begin with.

When a late payment really isn’t so out of character

Although this isn’t always the case, it’s often the case that people with poor credit are in that boat because they have a history of paying bills late. Your payment history carries more weight than any other factor when calculating your credit score. So it stands to reason that a series of late payments would result in a score that’s not so outstanding.

But if late payments are a recurring problem for you, then another one may not impact your credit score so much. And the reason is that that behavior is sort of what’s expected of you already.

As an example, FICO says that someone with a credit score of 607 might see that number drop to 570 for a 30-day late payment and 560 for a 90-day late payment. So we’d be talking about a drop of 37 points in the first scenario and 47 in the second. That’s not great, but it’s also not so drastic.

By contrast, someone with an excellent credit score of 793 might see that number drop to 710 for a 30-day late payment and 660 for a 90-day late payment. That would mean a drop of 83 points in the first situation and 133 points in the second. Clearly, those hits are more substantial.

It’s still best not to be late

Even though a late payment may not impact your credit score too much when it’s already poor, it’s still best to avoid delinquencies. If your credit is poor, you’re already in a position where it’s likely to be tough to get approved for a loan or line of credit. You don’t want to make your chances of approval even more slim.

In fact, if your credit is poor, it pays to take steps to bring your score up. And one good way to do that is to pay all of your bills on time. Whittling down an existing credit card balance could also have a big impact, if that’s something you’re able to do.

Meanwhile, it’s a smart idea to make a list of your various credit card and loan payment due dates so you can more easily keep track of those payments and avoid being late. Boosting your savings account balance by even a few hundred dollars could also make it so you’re less likely to be late with a bill due to a lack of money.

A side job could be your ticket to paying down existing credit card debt and boosting your savings — both of which could directly or indirectly help your credit score improve. It pays to explore the gig economy if you’re currently living paycheck to paycheck and know there’s no way to squeeze more money out of your existing salary.

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