What Does One Late Payment Do to Your Credit?

Sooner or later, it happens to almost everyone--a late payment. Whether the result of disorganization, financial strain or simple forgetfulness, a late payment typically elicits an additional fee from the creditor. The credit consequences, however, are far more damaging. If your creditor reports to the credit bureaus and the late payment appears on your credit report, it lowers your credit score, negatively impacting your creditworthiness.

Credit Damage

Each individual's credit report differs. Because of this, and the fact that the exact credit scoring formula is a trade secret and not public knowledge, there is no sure way to know how much your credit score will decrease before you make a late payment.

In general, the better your credit score is, the more damage it will incur when you pay a creditor late. For example, if your credit score is 680, MSN Money estimates that one late payment will cost you 60 to 80 points. If your credit score is 780, however, you can expect to lose from 90 to 110 points.

Circumstances to Consider

If you make a late payment to a creditor, such as your cellphone provider, that does not report to the credit bureaus, you have little to fear from immediate credit damage. Because the late payment won't appear on your credit report, it cannot adversely affect your scores.

If your creditor does report to the credit bureaus, you may still be in the clear. The credit bureaus collect your payment history in 30-day increments: for example, 30 days late, 60 days late, and so on. Even if you make your payment late, you can avert credit damage by making your payment before your creditor lists your account as 30 days delinquent.

Credit Recovery

One late payment hurts you, but your credit score recovers as soon as you resume timely payments to your creditor. Recent information carries greater weight than older data. Thus, the more time that passes, the less negative impact a single late payment has on your credit rating.

Removing Late Payments

You have the right to send your creditor a letter requesting that it erase evidence of your missed payment from your credit history, boosting your credit score. Your creditor is most likely to grant your request if this slip-up was your first, and you have proven your status as a good customer who generally pays on time. Not all creditors will modify your credit report as a gesture of goodwill, but making the request takes up little of your time and, if successful, can help you restore your good credit rating.