How Late Payments Affect Your Credit

Paying your bills late is one of the worst things that you can do to your credit report score. The purpose of credit scores is to give lenders an idea of whether they can expect to make money by doing business with you, or whether it is likely that they will lose money. When you frequently default on payments or make a payment that is three months or more overdue, creditors classify you as a high risk consumer.

In the long run, late payments can result in deductions from your credit score that make it more difficult for you to be approved for a credit card or loan even years later. If you are experiencing severe problems with your credit, you need to know your full options. Call New Orleans bankruptcy lawyers the Law Office of David D. Kervin, Jr. at 504-599-5906.

Protecting Your Credit

We all miss deadlines from time to time. Perhaps you submitted a bill payment a week late because you got caught up at work or school and just forgot. While you may get hit with a late fee and a temporarily increased interest rate on your credit card, your credit score will not be affected by one minor late payment. Even one or two 30 or 60-day late payments are unlikely to hurt your credit score much.

When you have an outstanding payment, you may have a temporary note on your credit report that states that your payment is currently 30 or 60 days late. Once you have caught up on payments, however, this note will disappear.

While one or two missed payments of 60 days or less here and there won’t hurt you in the long run, payments that are late by 90 days or more can have a terrible effect on your credit score. Even just one 90 day late payment will be recorded on your credit report for up to 7 years. Many creditors consider any late payment of 90 days or more to be a bellwether of your future financial behavior.

If you have been late by 90 days before, the chances that you will be that late again are much higher for you than for someone who has never made a 90 day late payment.

Payments that are late by 120 days or more can have even worse effects on your credit score because your creditor will likely send a collection agency after you or begin motions for repossession or foreclosure. These additional actions also have a considerable negative effect on your credit score.

Contact Us

If you have fallen behind with your payments and would like to learn more about your debt relief options, don’t hesitate to contact the New Orleans debt negotiation attorneys of the Law Office of David D. Kervin, Jr., LLC today at 504-599-5906.