How to recover from a late credit card payment
Quick insights
- If you pay your credit card bill late by one or more days, you might incur a late fee or penalty charge.
- Late credit card payments are typically reported to the credit bureaus and affect credit scores only when you are 30 days or more overdue.
- You can work towards improving your credit score with consistent, healthy financial habits, such as making your payments on time.
According to the Consumer Financial Protection Bureau (CFPB), credit card companies generally consider a payment late if it isn’t received by 5 p.m. on the day it’s due in the time zone stated on the billing statement—or the next business day if the due date is on a Sunday or a holiday.
So, what happens if your card payment is late? Let’s find out.
Understanding the impact of a missed credit card payment
Missing a credit card payment by even one day can have immediate consequences, such as incurring a late fee or penalty for paying past the due date.
Once you’re 30 days or more past the due date, creditors typically report the delinquency to credit bureaus. As a result, this delinquency will show up on your credit report and eventually affect your credit score.
Steps to rectify a late payment and prevent credit reporting impacts
- Contact the creditor immediately. It's essential to communicate early and proactively with the card issuer to explain the situation. If you call to talk to your card issuer, you can also let them know when they can expect your payment.
- Make the delinquent payment as soon as possible. If you pay before the 30-day mark, it can help prevent the delinquency from being reported to the credit bureaus, which could otherwise negatively impact your credit score.
- Set up alerts or automatic payments. Setting up automatic payments can be a good idea to avoid missing payments
Using goodwill letters and negotiations to remove late payments
If you already have a late payment noted on your credit report and want it removed, crafting an effective goodwill letter might be worth a shot. This gives you a chance to highlight positive past credit history.
If you had a specific reason for the late payment and couldn't inform your card issuer in advance, now is the time to explain the unforeseen circumstances that caused the delay. An unexpected job loss, medical emergency or the like might be considered acceptable reasons for a late payment, but there are no guarantees the creditor or credit bureau will cut you any slack. You can also try negotiating with creditors to remove late payment entries in exchange for settling the outstanding balance or continuing regular payments.
Another thing to keep an eye out for is making sure there are no late payments reported inaccurately. This is why regularly monitoring your credit reports can be helpful—you might spot incorrect information and can request to have it removed or corrected.
To dispute inaccurate information on your credit report, contact both the credit reporting company and the source of the error. If using a credit monitoring app, you can also use its dispute center to address the inaccuracies.
Does a seven-day late payment impact a credit score?
Late credit card payments typically aren’t reported to the credit bureaus until they are 30 days or more past due. If you notice a late credit card payment on your credit report for a payment that was less than 30 days overdue, contact the credit bureau and request for the late payment to be removed from your report.
Preventive strategies to maintain credit health
Once you’ve dealt with late payments that have already occurred, it’s time to get proactive to avoid missing any more payment due dates.
Autopay is one way to potentially help with this. Autopay means your bills will automatically be paid from an account of your choosing by the due date, ensuring your bill won’t be paid late—as long as there’s enough money in the account you designated for the payment.
But if lack of money or income is the issue, autopay might not help the situation. In that case, financial planning and budgeting might be called for, in addition to cutting out unnecessary spending, subscriptions or expenses.
Regularly monitoring credit reports is another proactive strategy to catch and address any discrepancies or unexpected entries early. If you’re just starting out on your finance journey, education tools and resources might be a good use of your time. Reading, learning and exploring helpful tools and resources can further you along as you try to improve your budgeting, financial planning and credit management.
Managing inability to pay and communicating with creditors
- Communicate proactively with creditors: Early communication with creditors is essential when financial difficulties arise. Communicating with creditors early and proactively can help you to negotiate possible payment plans or payment extensions.
- Seek professional advice: If you’re not sure where to turn or what to do next, consulting with a credit counselor or financial advisor for personalized advice and strategies might be worth considering.
- Legal implications and rights: Get familiar with your legal rights as a consumer in debt, as well as the regulations creditors must follow. This can help provide you with a sense of security and knowledge that can be invaluable as you figure out your next steps.
In conclusion
Late credit card payments happen, but it’s important to understand the potential consequences and how it may impact your credit—and your wallet. If you pay late by a day or more, you may be assessed a late fee or late payment penalty charge, but late payments typically don’t get reported to the credit bureaus until they are 30 days or more past due. At that point, you might start to see some effects to your credit score.
If you’re having a hard time remembering to pay your bills on time, consider setting up autopay. If the issue is a lack of funds or income, you might want to look into creating a budget and learning how to do some basic financial planning. It also doesn’t hurt to continue to read, learn and inform yourself about credit management and financial health. There are several financial tools and resources available that can help you along your financial journey.
