In this article:
A seven-day-late payment doesn't affect your credit score, but it can result in other potentially costly ramifications. If you're behind on a debt payment or you're worried about missing an upcoming one, here's what you need to know.
When Do Late Payments Get Reported?
Late payments typically don't get reported to the credit bureaus until 30 days after they're due. In the case of federal student loans, that timeline is extended to 90 days. If you make a payment within that period, such as seven days late, your creditor will not report the payment as late to the credit reporting agencies.
However, your lender may have other consequences that kick in when you've missed a payment, so it's still crucial that you always pay on time. Potential financial repercussions include the following.
Late Fee
Many lenders charge late fees when you miss a payment. However, the timeline and cost of late fees can vary depending on the type of debt:
- Credit cards: Credit card issuers typically assess a late fee if you're even a single day late, though there are a handful of credit cards that don't charge a late fee at all. The average credit card late fee is $32, according to the Consumer Financial Protection Bureau.
- Loans: If you miss a payment on a loan, your lender may give you a grace period of up to 15 days—or even 30 days, depending on the loan type—to get caught up before charging a late fee. If you don't pay your bill before the grace period ends, the late fee may be a percentage of your payment or a flat amount.
Interest Charges
If you miss a payment on a credit card, your card issuer will assess interest on the unpaid balance. What's more, it'll revoke your grace period on purchases, meaning that all purchases will accrue interest from the transaction date until you pay your balance in full.
Once your grace period is restored, you can continue to avoid interest charges as long as you pay your balance on time and in full every month.
Penalty APR
If you miss two credit card payments in a row, your card issuer may assess a penalty annual percentage rate (APR), which is usually around 30%. This rate will remain in effect for at least six months, depending on how long it takes you to get caught up on your payments.
Also note that, if your card is offering an introductory 0% APR promotion on purchases, balance transfers or both, missing a payment could cause you to lose that promotional rate.
What to Do if You've Missed a Payment
If you've recently missed a debt payment, there are several steps you can take to make things right and minimize the ramifications of the misstep:
- Pay right away. If possible, get caught up on your payments as quickly as possible, and that includes paying any interest or penalties added to your account.
- Contact your creditor. If you're having trouble paying what you owe or you're worried about future payments, consider reaching out to your lender to ask about relief options. Depending on the type of debt and your creditor, you may qualify for forbearance or a loan modification.
- Set up autopay. If you missed a payment out of forgetfulness, consider setting up automatic payments for at least the minimum amount due. Just keep in mind that you'll need to make sure to have sufficient funds in your bank account to cover the amount each month. Otherwise, you may be charged a returned payment fee.
- Consider other options. If you're experiencing financial hardship and don't see an end in sight, you may consider other approaches to tackling your debt. Consider consulting with a credit counselor to get personalized expert advice.
How to Avoid Late Payments
If this is your first missed payment, you may not need to make too many changes to your habits to avoid repeating your mistake. However, if you've missed multiple debt payments in the past or you're worried about missing more, here are some steps you can take to avoid late payments in the future:
- Get on a budget. If you don't already have one, make a budget to help you evaluate your spending habits and make the necessary adjustments to ensure you can afford your debt payments. In particular, it's important to focus on your discretionary spending, also known as nonessential spending. Bringing these costs down can help you afford your regular bills.
- Create alerts. Many lenders allow you to create customized alerts, including due date reminders. If you prefer to pay your bills manually, alerts can keep you on top of your obligations.
- Set up automatic payments. As previously mentioned, setting up autopay can make it so you don't have to remind yourself to pay your bill every month. Just make sure you keep enough money in your checking account to cover your payments.
- Change your due dates. Some lenders may allow you to adjust your due date to align better with your cash flow. If you have multiple payments throughout a month, moving them all to the same date—or within a few days of each other—can make it easier to keep track of them.
Monitor Your Credit to Maximize Your Effectiveness
While you don't have to worry about a seven-day-late payment impacting your credit score, it's still important to regularly review your credit history for insights and potential problems.
With Experian's free credit monitoring service, you'll get access to your FICO® Score☉ and Experian credit report. You'll also get real-time alerts when changes are made to your credit report, making it easier to understand how your actions can affect your credit score. It can also help you spot potential issues as they develop and address them before they cause damage.
