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Any payment made after its due date can be considered delinquent in the everyday sense. But "delinquency" has more specialized—and consequential—meanings in the lingo of consumer credit, debt collections and credit scoring. Here's what you need to understand about delinquency as it applies to your loans, credit cards and other credit accounts.
What Is Delinquent Debt?
In the world of credit reporting, a debt is considered delinquent when a borrower allows a full billing cycle (typically 30 days) to elapse without making a scheduled payment. Delinquency is typically recorded on your credit reports with one or more of the three major credit bureaus (Experian, TransUnion and Equifax) and can have significant negative consequences for your credit scores.
If additional billing periods pass without a scheduled payment, that is noted in your credit reports as well, with potentially more serious repercussions.
Debt Delinquency Timeframe
Here's how delinquencies of different durations can affect you and your credit.
| Days Past Due | Possible Consequence |
|---|---|
| 1-29: Less than one full billing period | Your creditor may charge a late fee. |
| 30-59: More than one billing period, but less than two | The debt may be reported as late to the credit bureaus, which has a negative impact on your credit.Your lender may impose additional late fees and penalties. |
| 60-89: More than two billing periods, but less than three | If the account is recorded as 60 days past due on your credit reports, there can be additional damage to your credit.Your lender may impose additional late fees. |
| 90-119: More than three billing periods, but less than four | Debt may be considered in default after 90 days, which can trigger legal action by the lender, including foreclosure or repossession.Accounts noted as more than 90 days past due have additional negative impacts on your score. |
| 120 or more: More than four billing periods | The account may be charged off and sent to a collection agency. Collections may cause additional damage to some credit scores. |
Let's take a look at the different delinquency periods in more detail.
1 - 29 Days Past Due
A payment made less than 30 days after its due date won't affect your credit report or score, but it still might have negative consequences in the form of late fees. Whether or not you'll be charged may depend on your lender's policies and on how late your payment is. For instance, some lenders accept payments received as many as 10 days late as if they're on time, while others impose fees if you're one day late.
Lenders often exercise some discretion about late fees, especially for borrowers with good on-time payment histories. If tardy payments are rare for you and you've incurred a late fee, your lender might waive it if you call them with an explanation.
30 - 59 Days Past Due
Once a payment is 30 days late, most lenders will report it as delinquent to the national credit bureaus, which causes a 30 days past due delinquency entry to appear on your credit reports. A delinquency entry can have a significant negative impact on your credit scores. Each lender has its own schedule for reporting to the credit bureaus, so it may take a few days or weeks after the 30-day mark for the delinquency to appear on your credit reports.
If you know you won't be able to make a payment on time, reaching out to your lender before the due date may help you avoid hurting your credit. Lenders generally would rather work with you to try to prevent the loss of funds than take more drastic action to recover losses after the fact and may be able to help with options including loan forbearance and repayment plans.
Learn more >> Late Payment vs. Missed Payment: What's the Difference?
60 - 89 Days Past Due
If you miss the due date for a second consecutive monthly payment, your lender will likely charge additional late fees or penalties (and your chances of getting them waived this time is slim). The account will be marked 60 days past due on your credit reports, which may cause a further decline in your credit scores.
Once you've passed the 60 days past due mark, your lender is likely to step up efforts to collect the missed payments. Expect letters, phone calls, texts and/or emails urging you to get caught up on your payments.
90 - 119 Days Past Due
Many lenders consider accounts that exceed 90 days past-due as being in default. If you reach this milestone, your lender may contact you, explaining that if you don't bring your account up to date, they'll take action to minimize their loss, potentially including filing a lawsuit or measures including the following:
- In the case of a mortgage loan, it could mean a notice declaring they'll initiate foreclosure in 30 days.
- With an auto loan, it could mean repossessing the vehicle. Some lenders pursue this option when payments are just 60 or even 30 days past due. Depending on state and local laws, they may not have to warn you before seizing your vehicle.
- In the case of a credit card account or personal loan, the lender could declare your account an uncollectable charge-off and close your account.
Charge-offs, repossessions and foreclosures all appear as negative entries on your credit reports, where they remain for seven years from the first missed payment that triggered them.
120 or More Days Past Due
After 120 days, in addition to any other steps made to recover their losses, the lender may turn your outstanding debt over to a third-party collection agency. If the debt is placed in collections, the original account will be noted as closed on your credit reports and a new account, created by the collection agency, may appear on your reports.
If you pay the agency the full amount you owe it, the collection account on your credit report will be marked as paid. If you negotiate a partial payment with the agency, your account will be marked as settled.
Paying off a collection account could help repair some credit report damage. Some, but not all, credit scoring models ignore paid collections when calculating scores. Paid, unpaid or settled collection accounts remain on your credit report for seven years from the date of the first delinquency that led to the charge-off.
How Does Delinquent Debt Affect Your Credit?
Even a single delinquency on your credit reports can do serious harm to your credit scores. That's because payment history is the most influential factor on FICO® Score☉ and VantageScore® credit scores. The number of points your score could fall because of your first delinquency depends on how high your score was before the missed payment, but the more payment due dates you miss, the greater the negative impact is on your credit score.
Delinquencies remain on your credit report for seven years from the original delinquency date. They will tend to have a negative influence on your credit scores as long as they persist, but the severity of their impact will lessen over time.
How to Avoid Delinquency
While it can be difficult to make all your payments on time, doing so can go a long way toward improving your financial health. Here are some suggestions on how to avoid becoming delinquent on your debts:
- Pay your bills on time. While it isn't technically delinquent to make a payment less than 30 days late, resolving to never miss a payment due date will spare you costly late fees and prevent delinquencies that hurt your credit scores. When it comes to strategies for avoiding late payments, technology can be a big help: Phone and smartwatch reminders can help you remember due dates, and automatic payments set up through your financial institution or your lender can mean you don't even have to remember. Just make sure you have sufficient funds in whichever account is used to make the payments.
- Revisit your budget. If you're coming up short on the cash you need to cover your debts, refining (or creating) a monthly budget could help you bring expenses and income into better alignment. Better understanding of the financial big picture can help you prioritize savings, identify the need for long-term and temporary spending cuts, and help you build an emergency fund that can make it easier to handle surprise expenses.
- Sync payment due dates with your payday. Many lenders will move your monthly payment due date upon request, and arranging them to come shortly after each payday (for instance, on the 4th and 19th of each month if you're paid on the 1st and the 15th) can help make sure there are funds in your checking account to cover your bills.
Learn more >> How to Improve Your Payment History
What to Do if You Have Delinquent Debt
If you have delinquent debt or debt in collections, you should act sooner than later to try to address the situation and begin rebuilding your credit and financial footing. Here are some steps you can take:
- Contact your lender. Try to work out a plan for getting your account back in good standing. If you're experiencing a financial hardship, be prepared to discuss the specifics (by documenting a change in household income or rise in expenses, for example) and ask about relief options.
- Consult a credit counselor. Certified credit counselors can help you get to the bottom of your debts and help you get them under control. If it proves impossible to manage your debts with your current income, a counselor can help you get into a debt management plan (DMP), which could bruise your credit but eventually eliminates debt in a way that allows faster recovery than bankruptcy would.
- Consider a debt consolidation loan. Using a loan with a relatively low interest rate to pay down multiple high-interest debts is a proven strategy known as debt consolidation. This strategy works especially well for credit card balances and can simplify your budget, save you interest charges and even help improve your credit scores.
The Bottom Line
One or more delinquencies on your credit reports can do serious harm to your credit scores and, unless you catch up on what you owe, can lead to repercussions including lawsuits, repossession and foreclosure. If you're facing delinquency on one or more credit accounts, it's best to reach out to your lender to see about available relief options. If a debt consolidation strategy can work for you, view debt consolidation loans matched to your credit profile.