What are the different categories of late payments and how does your FICO Score consider late payments?

Your FICO Score considers late payments using these general criteria; how recent the late payments are, how severe the late payments are, and how frequently the late payments occur. So this means that a recent late payment, could be more damaging to your score than a number of late payments that happened a long time ago.

You may have noticed on your credit report that late payments are listed by how late the payments are. Typically, creditors report late payments in one of these categories:

  • 30-days late
  • 60-days late
  • 90-days late
  • 120-days late
  • 150-days late
  • Charge off (written off as a loss because of severe delinquency)

Of course a 90-day late is worse than a 30-day late, but the important thing to understand is that you can recover from a late payment prior to charge-off by getting and staying current with your payments. If however, you continue not to pay your debt and your creditor either charges it off or sends it to a collection agency, it is considered a significant event with regard to your score and will likely have a severe negative impact.

It's important to always stay on top of all of your bills; your payment history is the largest factor in your FICO Score - 35%. There may be circumstances which cause you to be unable to keep current with your bills - maybe an unexpected medical emergency or losing your job.

Before being late for any payment, we recommend that you reach out to your creditor. The creditor may be willing to work something out with you so that it can work for both parties. If your creditors won't work with you, try to avoid having your account going delinquent so that the creditor won't sell your account to a collection agency. Again, late payments hurt, but you can get current with them by paying them off. You can never again get that account current once it is turned over to a collection agency.