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It’s normal for your FICO® Score to drop from time to time.
Usually, there’s only a small, temporary dip. Say you apply for a new credit card, or your balance is a little higher than usual one month. You might lose a few points, then quickly gain them back.
But there’s one simple mistake that could cause your FICO® Score to drop by 100 points or more: missing a credit card payment.
Your credit score won’t drop the day after your due date, though. Here’s how long it takes for a missed payment to hit your report — and how to avoid this credit score disaster.
First: why do missed payments hurt so much?
Five factors go into your FICO® Score, and some of them matter more than others.
- Payment history: 35%
- Amounts owed: 30%
- Length of credit history: 15%
- Credit mix: 10%
- New credit: 10%
Your payment history has the biggest impact on your score. When a payment is reported late, you’ve damaged the single most important part of your credit profile.
When does a missed payment actually hit your credit?
If you’re a few days late, you may be charged a late fee — and in some cases, a penalty APR, too. But there won’t be any effect on your credit score yet.
Credit card issuers wait 30 days past your due date before reporting a missed payment to the credit bureaus. And this can have a massive impact on your credit score.
And the longer you wait, the worse it gets. Your score will drop further when the payment is 60, 90, and 120 days past due.
It gets even worse if your account is sent to collections — a major red flag on your credit report that lasts for seven years.
How to avoid missing a credit card payment
It’s easy to forget a credit card payment, especially if you have multiple cards with different due dates.
Here are some easy ways to avoid it:
- Set up automatic payments. Even paying the minimum amount every month will prevent a late payment.
- Change all your due dates to the same day. Credit card issuers will usually let you change your payment date. The fewer due dates you have, the easier it is not to miss any.
- Set up reminders. Most credit card companies give you the option to get alerts when your due date is coming up. Otherwise, you can set your own reminders.
If you can’t make the minimum payment on time, then call your credit card issuer and ask for help. In some cases, they may give you a little extra time to pay — and even a temporary lower APR.
Struggling to keep up with credit card payments? Consider a balance transfer
If you’re having a hard time paying your credit card bills on time and in full each month, then look into a balance transfer card. These cards let you press pause on interest charges for up to two years. That means every dollar you pay goes straight to your balance — not interest.
The top balance transfer cards available today offer 18, 21, or even 24 full months to pay off your debt without interest tacking on a single extra penny to your balance during that time. Used correctly, you could save hundreds — or even thousands — of dollars by going this route and eliminating your debt during the interest-free window.
Check out our full list of the best 0% intro APR cards to review your options and start making progress on your debt today.
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