Will a One-Time Late Bill Affect My Credit?

Your FICO credit score can determine the interest rate you'll pay on a loan or credit card. It can also impact whether an employer will hire you or not. It's a very important three-digit number that ranges from 300 to 850. Credit scores reflect how you handle your credit, so it's prudent to understand how a one-time late payment on a bill can impact your score.

Your Score

The information on your credit report determines your FICO credit score. The score reflects both positive and negative payment history. Creditors report late payments to the credit bureau. The later the payment, the more damage it does to your score. One late payment can drop your FICO credit score between 60 to 110 points, according to MSN Money. The higher your credit score, the more it falls when a late payment hits your report.

Consequences

The late payment will continue to affect your credit for a very long time. Late payments linger on your credit report for seven years from the date the late payment posts to the report. FICO will continue to consider the late payment in the calculation of your score for as long as it remains on the credit report. The older the late payment gets, the less of an impact it will have.

Prevention/Solution

How you pay your bills is the largest factor in the calculation of your FICO credit score. It is the biggest determining barometer on how high or low your score will be because payment history accounts for 35 percent of your score. If your score is damaged from one or more late payments, continuing to make on-time payments will improve your credit score over time as your build a positive payment history and the negative credit items fall off your credit report.

Considerations

Credit bureaus sometimes make mistakes. To achieve the best score, you have to keep an eye on your credit report and ensure that the data on it is accurate. Under the Fair and Accurate Credit Transactions Act (FACTA), you can receive one free credit report each year from TransUnion, Experian and Equifax. The official site to order your free credit report is AnnualCreditReport.com. The site allows you to order the report online, or gives you information on how to order the report by mail or phone. Also, bureaus are required by law to include only accurate information on a credit report. If you discover an error, you have the right to dispute it with each bureau. The bureau then has up to 30 days to investigate and make corrections. You can file a dispute in one of three ways: online at the bureau's website, by phone or by mail.