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Will someone please explain this article on late payments?!

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Joboak
New Member

Will someone please explain this article on late payments?!

I was recently five days past due on a credit card. So I started doing some searching on how it would effect my credit when I found this article.
"Think about how you've repaid the bank in the past. How often (and how recently) have you made other late payments? If you're not sure, scanning your credit reports for delinquencies should jog your memory. Making a late payment may be out of character for you, but it can still be damaging. Depending on your current FICO score, a single 30-day late payment can drop your FICO score by 60 to 110 points. (For more on this topic, see my story "FICO reveals how common credit mistakes affect scores.")

That drop can also follow a payment that's fewer than 30 days late, depending on when your bank reports your delinquency. "Be aware that when it comes to the reporting of late payments on credit reports, a payment that's late by one to 30 days is considered '30 days late,' late by 31 to 60 days is considered '60 days late,' etc.," says FICO's Paperno in an e-mail. "As a result, any payment made up to 30 days late will be treated as a '30-day late' by the FICO score."

Credit bureaus report late data differently, says Norm Magnuson, spokesman for the Consumer Data Industry Association, the trade group for the bureaus. The bureaus don't label a late payment as 30 days late unless it's 30-59 days late. "Therefore, Adriana E. would not be reported as 30 days late if she paid the bill 2-3 weeks following the due date."

So my confusion is... How can FICO drop a score on a payment that's 5 days late when the credit bureaus don't have it reported until it's past 30 days? What am I missing?
Message 1 of 7
6 REPLIES 6
guiness56
Epic Contributor

Re: Will someone please explain this article on late payments?!

When the creditor reports you as late, even if one day past the due date, they can.  It just means you did not pay by the scheduled due date.

 

But the CRAs have strict criteria stating that late payments cannot be on your credit report until you are at least 30 days past the due date.

 

So your 5 day late payment will not count against you.  If it did that is disputable.

 

 

Message 2 of 7
Joboak
New Member

Re: Will someone please explain this article on late payments?!

So regardless of what the article says about FICO scoring ("Be aware that when it comes to the reporting of late payments on credit reports, a payment that's late by one to 30 days is considered '30 days late,' late by 31 to 60 days is considered '60 days late,' etc.," says FICO's Paperno in an e-mail. "As a result, any payment made up to 30 days late will be treated as a '30-day late' by the FICO score.") as long as I'm not over 30 days late... My score will not be effected?
Message 3 of 7
guiness56
Epic Contributor

Re: Will someone please explain this article on late payments?!

No.  The paragraph below that explains how the CRAs report late payments.  You have to be 30 days past the due date to be considered  late and reportable on your credit report.

 

 

 

 

Message 4 of 7
AndySoCal
Valued Contributor

Re: Will someone please explain this article on late payments?!

You should only see a late payment if you are more than thirty days late. I was once about the same number of days late once on a credit card payment.  After making a pyament in full to the credit card company I asked the CSR if this would affect make credit.  The CSR said no for the same reason stated above. My credit was not affrected. What caused the problem was for some reason I did not put the payment into my bill pay.  I had the money to pay the bill. The end result I think I have a couple more grey hairs now than before this happened.

 

Hope this helps

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Message 5 of 7
Joboak
New Member

Re: Will someone please explain this article on late payments?!

Well it does make me feel like I can sleep now. I guess the whole "FICO considers payments 1 to 30 days late... As 30 days late. And payments 30 to 60 days late... As 60 days late" really scared the hell out of me!!
Message 6 of 7
CreditUnionFan
Valued Contributor

Re: Will someone please explain this article on late payments?!

As others have pointed out, in order to be reported late on a credit report, it has to be 30 days past the due date.

 

Some loans have windows such as a car loan with 10 days past the stated due date, or a mortgage that may allow up to 15 past the due date before a late fee is charged.

 

Most credit cards, however, implement a late fee immediately, and can retain that information, adjust APR or credit line, for being as little as one minute past their established cutoff time, such as 5:00 PM on the due date.

I was going to garden... Honest!
Message 7 of 7
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