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Late Mortgage Payments' Effect on Credit


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TERMINOLOGY

Late mortgage payments can be extremely detrimental to your credit report. If you are on the verge of making a late payment, there are several things that you will want to consider. Here are the basics of how your credit is affected by late mortgage payments.

Late Mortgage Payments

With most mortgages, you are going to have a grace period. This means that you are going to have 10 to 15 days after your due date to actually make the payment with no penalty. Beyond that, you are going to be considered late on your payment. The lender will charge you a late fee and report it to the credit bureaus.

Effect on Credit

Having a late payment on your credit report can reflect very negatively on you. When you have one late payment, it is going to potentially lower your credit score by 40 to 70 points. If you get in the habit of paying your mortgage late, you are really going to hurt your chances of getting credit again in the future. Lenders will see that you do not pay your bills on time, and they are going to be very skeptical about giving you additional credit.