Made a Late Payment. Will it Affect My Credit Score?

Let’s say you made one of
those big no-no credit mistakes.
You went out of town on
vacation for a week, came back
home and realized you totally
forgot to pay your credit card
bill. It happens all of the time.
Chances are you are okay. The
worst thing that may happen is
you have to pay a late fee, but
more than likely the creditor
won ’t report your one-time
late payment to the credit
agencies. Most lenders and
creditors will not report bad
repayment history until you are
90 days late, and if they do not
report it, it does not end up on
your credit report. Since your
credit score is calculated by the
information on your credit
report, you’re in the clear.
But what if they do and that late
payment ends up on your credit
report. Sadly, if you have an
otherwise good credit score,
this will affect you the most. It
could knock 100 points off your
credit score – ouch! Late
payments by people who
already have a crummy credit
score won ’t get dinged nearly
as bad.
This may actually not be entirely
true though. The way FICO is
calculating credit scores going
forward now gives some
forgiveness to people who
made that one-time mistake,
but will further penalize people
who have a history of not
paying their bills.
The best solution to make sure
this does not happen is to set up
automated bill paying. That
way, no matter what, your bills
get paid.
If, however, you have a history
of making late payments,
you ’re in a bit more trouble.
You’ll wan to get a copy of
your credit report and take
some of the steps to increase
your credit score, which you can
do completely on your own.