Does Being a Week Late Affect Your Credit?

Your credit score ranges from 300 to 850, according to FICO. A higher score can qualify you for better rates on loans, credit cards and other credit-based products. Your FICO score can even make the difference between an employer hiring you versus another candidate or whether an insurer will issue a policy to you or not. Credit scores are important, so it's wise to understand if a one week late payment can impact your credit.

FICO Scores

According to FICO, certain factors are considered in the scoring model's computation of your score. The biggest factor in your score is how well you pay your bills, which accounts for 35 percent. The level of debt you have is the second-largest factor at 30 percent. The remaining three factors comprise the rest of the score. The length of your credit history is 15 percent. Ten percent is the mix of credit accounts one your credit report and the remaining 10 percent reflects how much new credit you've recently applied for.

Late Payments

A payment that's one week late is not reported to the credit bureau. Creditors report late payments to the credit bureaus in 30-day increments. A 30-day late means the payment is one month late, 60-day late means the payment is two months late and so forth. A payment that's one week late may incur a late fee from the creditor but will not appear on your report until it reaches the 30-day mark, and therefore, does not impact your credit.

Considerations

If the creditor charges a late fee for past due payments, these late fees are added to the balance of your debt. This can increase the overall amount of debt that you owe. How much debt you have is 30 percent of your score. FICO measures your credit utilization ratio. The more debt you have, the higher this ratio and therefore, the lower your credit score. Conversely, the less debt you have, the lower this ratio and the higher your credit score. For the best score, FICO suggests paying down the amount of debt that you have and keep balances low.

Prevention/Solution

To avoid or minimize late payments, consider setting up automatic payments on your bills. Once set up with your creditor, the amount of the bill is automatically deducted from whichever account you designate. This prevents you from accidentally forgetting to make a payment. If you do discover that you're late on a payment, pay the bill as quickly as possible so that the payment posts to your account before the bill reaches the 30-day cutoff.