If you rely heavily on your credit card to cover most of your bills or shopping costs, then you must treat your credit payments with utmost seriousness.
Maintaining a clean credit repayment history is an essential step to boosting your credit score. You can achieve this by maintaining timely repayments. Late payment may affect your credit score, but it depends on various factors such as how late the payment was, your credit history and credit score. FICO revealed in its credit damage data that a single delayed credit payment might cost you as much as 180 FICO score points.
Late payments and credit history
Late payment will affect your credit score even if you previously maintained a perfect score or timely payments. The 180-point drop is thus likely to happen to a person with an excellent credit score even if they have a clean record. The situation is slightly different for individuals with lower credit scores because their history already indicates higher risk. A single missed payment will thus not lead to a significant credit score decline.
The impact of a late credit card payment
There is another primary reason for you to avoid late credit card payments other than significantly lowering your credit score. It will taint your credit score for as long as seven years, and this is a problem because it will make it hard for you to regain the lost points. The points will also not return automatically when the seven years expire, which means you will have to work hard to get your credit score to previous highs.
Making payments on time is critical but missing a payment by a day is not that big of a deal thanks to grace periods. Lenders usually provide grace periods around ten days before the strict measures kick in. It is best to be always prepared in advance so that you avoid any surprises or inconveniences that might make it impossible for you to make a payment, thus affecting your credit score. In case you find yourself in such an unavoidable situation, contact your creditor to determine if they can extend your grace period or push back the payment to the next month.