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Credit scores are used by financial institutions as a way to predict whether you are a “high risk” customer. If your credit score is too low the creditors will see that you cannot be trusted to make on time payments.  So in essence you are considered as somebody bad for their business. Once you understand this fact it will be a lot easier to manage your credit card late payments.

When your “late payments” are infrequent, your credit score will not plummet as long as this is not done on a regular basis. If you are in the habit of making late payments on a regular basis this will cause long term damage on your credit scores. However, if you have a 90 days late payment on your record even if it is just one time, your credit score will be damage up to seven years. Being 90 days late labels you as “repeat offender” great risks for creditors.  The goal of most credit scoring models is to make a prediction if what type of offender you are. The fact that you paid late is so important in determining your credit score.

To summarize how late payments affect your credit score:

• 30 days late- As previously mention, as long as you have not done this frequently there is no cause for worry.
• 60 days late- same principle applies like when you are 30 days late. Again, if this is done often then damage to your credit score will apply.
• 90 days late- Has damaging result even if it just done once. Damage on your credit scores for 7 years as mentioned above.
• 120+ days late-Although this has no direct impact on your credit score. At this juncture, your debt will be sold to a collection agency.

If you are 90 days late, you still got an option so that your credit scores will not suffer. Review all the information in your credit reports. Check whether it is accurately reported. If you find discrepancies in your credit report then you have the right to dispute it. Your main goal would be to correct or removed the item wrongly reported. Once this is removed or corrected you will see an increase in your credit score.

There are instances when these cut-off times give the creditors an opportunity to manipulate your payments in order to increase your late fees and penalty rates. Sometimes these credit card companies set a due date that coincides with a non-business day; when you there is no way for you to process your payments. Exorbitant fees and penalties are charge to you as a result.

The Federal Reserve Board wants to resolve this unfair practice so they issued a mandate saying that lenders should disclose important facts about their customer loans (including credit cards). They require these lenders to post cut off times near the due dates on the front page of the credit card monthly statement if the deadlines fall before 5 p.m. At present, there is no requirement for notifying cardholders about these cut off times, although some lenders do provide this on the back of the monthly statement in fine print which is often not readable.

There are things that happen when you make a late payment on your credit card.

• Your creditor will charge you a late payment fee. Late fee ranges from $15 to $35.
• Your interest rate will increase. Creditors will increase your rate to the default rate which is the highest interest rate charged by a creditor as a penalty.
• The credit bureaus will be notified if you are more than 30 days late.
• Your credit score will drop.

Being delinquent means not paying your dues on the due date for whatever reason. Having delays in your payments can drop your credit score by 50 points or so, because payment history makes up 35% of the credit score. To help you from getting behind, try practicing the following helpful tips:

• How to avoid being delinquent on my account?
• Let the online credit card company send you monthly automatic reminders.
• Set up your calendar to remind you at least seven days before your due date.
• As alternative, set up your calendar on your phone to alert you seven days before your payments are due.
• Set up an automatic payment with your banking company.
• Set up automatic withdrawals through credit card or financial company.
• Try these simple tips, and never miss your payment again.
• What if I’m only a few days delayed on payment?

Some lending institutions and credit card companies have grace periods, so if you’re just a few days late, there are no charges or fees. Even so, be warned that many credit card companies don’t have grace periods, so if you’re behind just one day, you’ll be hit with a high late fee. If you’re in a special program requiring timely payments, this may ruin your prospect of receiving a credit increase. Be sure to check with your credit card company about policies on grace periods.

What if I was 30 days late once or twice?

You’ll severely spoil your credit score because payment history counts for 35% of credit score. Fico looks at your most recent payment activity, so if you’re late two times within two years, your score will take a severe hit. But negative information the previous two years does not count as much.

See, being delinquent on your account could cost you money and give you a serious drop of credit score. So make it a point to be on time with payments, because just one 30-day late indication could mean a drop of your score by 50 points!

Credit scores are used by financial institutions as a way to predict whether you are a “high risk” customer. If your credit score is too low the creditors will see that you cannot be trusted to make on time payments. If you are in the habit of making late payments on a regular basis this will cause long term damage on your credit scores. Being 90 days late labels you as “repeat offender” which carries great risks for creditors.  The fact that you paid late is so important in determining your present credit score.

How late payments affect your credit score:

• 30 days late- As long as you have not done this frequently there is no cause for worry.
• 60 days late- same principle applies like when you are 30 days late. Again, if this is done often then damage to your credit score will apply.
• 90 days late- Has damaging result even if it just done once. Damage on your credit scores for 7 years.

What is lender report? It is a process wherein your lenders send the three major credit bureaus the current status of your account each month through electronic tape. This electronic tape is loaded and run in the bureaus databases so an updated record of your accounts is seen month after month. The data that lenders give you is based on activities on your account during the previous billing period. The credit reports that will be generated display either a 30 or 60 day old credit. Prior late payments will remain on your credit report not longer than seven years from the date it was reported. The credit reporting agencies program their systems to automatically remove prior late payments before its 7th year anniversary so when this happens there is no need for you to ask for your late payments to be removed from their system.

Methods of Removing Late Payments on your Credit History

• Request goodwill adjustment from your original creditors. If you have a previous good payment history and have established a good relationship with your creditor they will surely grant your request. What you need to do is to write a letter to your creditor that explains your present financial situation stating the reason for your late payment also asking him for an adjustment to your credit report.
• Offer to sign up for automatic payments. This assures both parties that the creditor is insured of timely future payments.
• Dispute the late payment for discrepancies. If you find any inaccuracies to your late payment records then you can file for a dispute so that the negative entry can be replaced especially when it comes to wrong calculations made on your late payment history. Credit bureaus do not check the accuracy of the items send to them by your creditors. They just take their payment and report the item without double checking if the figures given are correct. Because of the Fair Credit Reporting Act you are given the right to demand for an investigation into the listing that the credit bureau has.