Late Payments Hurt Your Credit

Post date: 3/1/22
Availability and special terms subject to change.


We’ve all made mistakes and missed a payment. But did you know that a payment reported just 30 days late can significantly drop your credit score? Overdue payments have the largest negative impact on your score versus other factors.

When you have a payment that is 30 days past due, it’s considered late and can be reported to the various credit reporting bureaus. Don’t underestimate the impact; these overdue payments can substantially drop your score.

At First United CU, we’ve had members lose up to 110 points on their credit score for a single 30-day late payment. Some experts say the loss in points can be as high as 100 points per payment. For payments 60 or 90 days late, the impact is even greater.

Credit scores range from 300 to 850, and the higher the score, the better.

An excellent score ranges between 781-850, a good score, 661-780, fair, 601-660, poor, 501-600, and bad, below 500. Each score is calculated using the same variables, comprised of:

  • How promptly you pay off credit cards and loans.
  • How consistently you pay rent, utilities, and other regular expenses.
  • How much debt you have outstanding.
  • How much credit you have available on credit cards and home equity loans.

With a stronger credit score, you’re rewarded with lower interest rates on loans. A lower score means you’ll likely pay higher interest rates.

What’s considered a payment?

They’re payments you make for consumer loans, credit cards, mortgage payments, utility bills, membership dues, cell phone bills, medical and dental bills, insurance premiums, and much more. It depends on the vendor how soon they report a late payment to the credit reporting agency they use. Legally, they can report your payment late at 30 days.

Problems can compound.

Now imagine how many points you might lose for multiple 30-day late payments; a credit score can go from 725 to 550 overnight. One bad month, loss of a job, or even a simple math mistake in your checking account could lead to a huge downturn for your credit report. That’s why we encourage you to contact us — and any company you do business with — if you’re having financial difficulties.

There’s one more faulty assumption.

That is how quickly you can regain lost points. You may assume that bringing your accounts current will recoup those points immediately. Unfortunately, it can take up to 12 months to regain 100 lost points — what’s lost in a day can take months to recover. And while you eventually will regain those points, an overdue payment can remain on your credit report for 7½ years from when initially reported late  — though its effect will diminish over time.

On-time payments will boost your credit score.

To help you make timely payments — consistently — take advantage of the tools available. These include Online Bill Pay, Alerts, Credit Card Controls, automatic loan payments, and automatic debits. The trick is to stay on top of your bills, their due dates, and your cash flow. Online budgeting programs can also assist, such as Simplifi (by Quicken) or You Need A Budget. But choose whatever system that’s right for you – even notes on your fridge if they work!

Our goal? To keep your score above 650.

Stop in to see one of our friendly loan officers today. We’ll review your credit report with you and share tips to help you get your credit score where you want it to be.


More Tips To Improve Your Credit Score:

  • Review your credit report: You are entitled to a free credit report annually from each major credit-reporting agency. Check your report for errors. Errors can be costly and bring down your score. If you are unsure how to read your report, visit First United Credit Union. We can review your report with you and explain the details.
  • Correct errors: If you find errors, visit for the steps you can take. It is vital to fix errors quickly – they are usually damaging to your credit score.
  • Keep a balanced credit portfolio: Don’t exhaust all your available credit; having balances available on your credit line is a plus. And borrow only from lenders you trust, keeping a blend of both secured and unsecured credit. Other items that impact your credit portfolio include the amount of your debt, the length of your credit history, outstanding applications, and the distinct types of credit accounts you hold.
  • Avoid scams: There are scams out there that may claim to repair your credit. Unfortunately, there are no quick fixes or tricks that garner immediate results. You can repair your credit yourself – for free –but it takes time, patience, and diligence.