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How One Late Payment Can Kill Your Credit Score

Updated: 02/16/2021 by Financial Samurai 55 Comments

One late payment can kill your credit score. Therefore, it is very important for you to be diligent and pay all your bills one time.

FICO gave a small peek behind the curtain at how their scoring model works and showed just how much mortgage delinquencies affect your credit score. 

The example they gave drew attention to three different FICO scores on the higher end of the spectrum (680, 720, and 780) and how one late payment of 30 days affected each score.

According to FICO, the impact of a 30-day late payment on a consumer’s mortgage varies greatly depending on how high the consumer’s credit score already was.

How One Late Payment Can Hurt Your Credit Score

Here’s how much one late payment can hurt your credit score depending on your current credit score:

  • People with a 680 saw their score drop to 530.
  • People with 720 saw a drop down to 525.
  • People with 780 saw their credit scores drop as low as 620.

How Long It Takes For Your Credit Score To Recover After A Late Payment

Most consumers probably already know it ll take a while for their credit scores to bounce back. However, here’s how long it will take for your credit score to recover after one late payment.

  • It takes a 680 up to 9 months to recover.
  • 720 scores can take up to 2.5 years to recover.
  • 780 credit scores take 3 whole years to fully recover.

Interestingly enough, consumers don’t lose more points for going forward with a short sale; the impact to their credit scores is just as bad as an outright foreclosure.

Don’t Let One Late Payment Kill Your Credit Score

One Late Payment Can Kill Your Credit Score

As you can see, the higher your credit score already is, the more you have to lose. Missing a payment hurts high credit scores the worst and it takes longer to recover.

Indeed, their scoring methods almost remind me of how I was graded in high school.  You had to work hard to achieve and maintain an A+ in class. However, the minute you slipped up and missed an assignment, your grades began to fall. You are left to fight a long, uphill battle to get your grades back up.

Similarly, those with the highest credit scores get hit the hardest by slipping up on something as seemingly innocuous as missing one payment date. Just look at the 780 score. One late payment means losing as many as 160 points. Further, you will have to wait up to 3 years for a full recovery!

So what have we learned? Every little detail matters to your credit history and scores. Don’t slip up!

If you are looking to refinance a mortgage, get a car loan, borrow money for school, or get a job, it is imperative that you not only know your credit score. Further, also verify your credit report is free from errors. Studies have shown that roughly 30% of all credit reports have errors.

Related: Ranking Debt Types From Best To Worst

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Don't let one late payment hurt your credit score
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Filed Under: Credit Score, Debt

Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.

I spent 13 years working at Goldman Sachs and Credit Suisse (RIP). In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.

In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.

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Comments

  1. Margie Aaron says

    October 19, 2020 at 5:16 am

    I have a credit card that went to collections. I paid it off over time in full even after they offered me to pay at lower amount – interest. On my credit report it shows negatively, I did all I could to get it off but shows the failure to pay originally … I paid it in full and feeling like I’m stuck with the negativity on my report despite my efforts to pay all that I owed. All loans I applied for was turned down, to whole situation got worse when I wanted to buy a house and I was still not approved all due to my credit history. I was so furious and wanted to get solution to this luckily for me I got a solution when I contact tom.lawrence114 at g mail com after I watched a Youtube video and how he had helped people got out of credit issues. He explained the whole process and in few days he helped me removed every collections, negative items on my credit history
    What amazes me was how fast he got me out of this mess and got approved of the house afterwards

    Reply
  2. freud says

    December 30, 2015 at 5:19 pm

    I’m wondering about something.

    I have a 30, 60 and 90 days late payment, on a paid credit card. This occured in 2012. We are now entering 2016. I haven’t used the card since.

    Does the effect of the 90 days late have the same effect or does it dissipate over time?

    Reply
  3. Thaler says

    September 21, 2013 at 1:18 pm

    Credit score and how easy the score is to lower is a scam to charge people higher interest rates.

    Reply
  4. Will says

    October 17, 2012 at 7:53 am

    I have a roommate and I am worried if having to pay on the last day my shared cell phone bill that is under my name for both my friend and me, has an effect on my credit score, I already have a 300,000 medical student loan so I will avoid any possible threat to my credit score, besides my grandfather will kill me! Can any one answer me if there is an effect on my credit score if I always pay a tmobile cell phone bill the very last day said on the bill that I CAN pay? I would appreciate this greatly.

    Reply
    • Financial Samurai says

      October 17, 2012 at 8:29 am

      Will, you should be OK, but why risk it and pay one day earlier than the last day?

      You should click the link in the article to check your credit score that’s on file now for free. Just cancel within the allotted time if you don’t want to pay credit monitoring service.

      With $300,000 in debt, a 1% increase in rate due to a bad credit score which you can fix is an extra $3,000 a year!

      Reply
  5. New says

    August 3, 2012 at 4:18 am

    The credit reporting laws have changed. You can increase your score drastically within a few months. Previously, it took about six to nine months for your score to update – now it takes around 60 days. So there is hope out there!

    Reply
  6. Beck says

    July 20, 2012 at 12:41 pm

    My mom is purchasing a house for me due to me having to foreclose on mine because my husband picked up and left me with two kids under the ago of 4. She lives in a house that my step dad owns, has not debt, a quite a bit of money saved from selling the house a i grew up in.

    She went to get pre approved and for some reason she only has two credit scores. One is 780, the other 605. So she got denied! Come to find out it was from a leased car she turned in and they had charged her for damages, which the bill was being mailed to her old address for months before they finally reached her. She had paid the bill, but not the late feesshe didn’t know about. She talked to the finance company and they admit its their error and are taking off a 30, 60, and 90 day late blemish off of her report. My question is, how much will this raise her score if its completely removed? We are looking to get it up to at least 680.

    Reply
    • Financial Samurai says

      July 20, 2012 at 2:45 pm

      Argh, sucks about the credit score. This is really why everybody needs to check their credit scores and make sure there’s nothing funky going on!

      When my utility company screwed me for an $8 missing payment, they smashed one report score by around 100 points from 780 to 680. Delayed my mortgage refinance process by another 2 weeks and was a total disaster. But, once I got my score back, I bounced back to 780 for this score.

      Hence, I think once the error is removed, it might take 30 days or 90 days, you should see at least back to 700, if not maybe even 780.

      Reply
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