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Impact of Missing a Credit Card Payment on your Credit Score

Your credit score is one of the biggest factors in determining your qualification and interest rate when applying for a home loan. Missing a credit card payment is not the end of the world and it will not automatically prevent you from being able to qualify for the purchase of a home, but the event will negatively impact your credit score.

Best Case Scenario:

If you are lucky, the lender will not report the late to the three credit bureaus. An account is not late until the account is over 30 days late and a payment made within the 30 days may have some late penalties, but will not negatively impact on your credit. If the payment is has not been made in 30 days, your lender is within their rights to report the late to the three credit bureaus. Just because you’re late however, does not mean that they will report it. The larger creditors have analytical models that analyze payment history of their customers and sometimes if you have been making on-time payments for a long time, it is possible that they might not report the late.

Worse Case Scenario:

If your lender does report a late payment to the credit bureaus it will take anywhere between 60-90 days to impact your credit, and when it does it can cause up to a 110 point decrease on your credit score depending on your total payment history. Unfortunately, the higher your score before the late, the more likely that your score will suffer a greater loss. Over time your score will improve with positive payment history.  Search this blog for tips on how to remove derogatory items from your credit report without paying a credit repair company.

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