Having a 30-day late payment on your credit report is damaging. It will cause an immediate drop in your credit score and affect your ability to obtain lower interest rates and quality credit. Consumers often ask me how creditors determine the passing of 30 days. It's not as simple as you may think.

While not all creditors treat late payments the same, the credit reporting industry will not report you late if you make your payment 1 to 29 days after the due date. In other words, you have a grace period of 29 days to make the monthly payment to avoid getting a derogatory on your credit report. This is true for credit cards, mortgages, auto loans and any other installment contract.

Keep in mind that if you are one day late, pursuant to most credit agreements, you are in default. You will likely be penalized either with late fees or even an increase in your interest rate.  This is an odd situation where the creditor says you are late, but your credit report will not show the late payment until a full 30 days after the payment is due.  I strongly urge you to review your credit contract to understand the ramifications of a late payment. If you do not have a copy you can easily find it on line. The CFPB has a database at this link: https://www.consumerfinance.gov/credit-cards/agreements/.

WHAT IS THE DUE DATE?

Your monthly statement will clearly provide the due date and when the payment is considered received.  The credit agreement usually indicates that the payment must reach the creditor for them to consider it received as of that date.  Reaching the creditor means received by them. For example, if your payment is due by December 1, and you mail it out on December 1, it's going to be considered late. While many credit cards, mortgages and auto loans now permit automated payments, for those of you who still use the mail, be sure to mail the payment out at least one week in advance so it is received, and will not adversely impact your credit.

CONCLUSION

Late payments should be avoided. 30, 60, 90, and 120 days late is progressively worse and extremely damaging to your profile. Your creditor will consider you late if your payment is not received by the due date.  But, for the purposes of reporting, the credit industry gives you a 29-day window AFTER THE DUE DATE, before a derogatory is issued on your credit report.