Home > Credit Cards > What Is a Credit Card Delinquency?

Comments 0 Comments

If you learn only one thing about credit, let it be this: Pay your bills on time.

Fail to do so, and you’ll have trouble getting loans or credit cards. Think of it this way: When you apply for a job, your potential employer looks at your resume and watches out for any indication you may not be a reliable employee. When you apply for a loan, your potential lender looks at your credit reports. Having a few (or many) credit card delinquencies on your credit report is like adding a section to your resume documenting all the times you were late to work or called in sick — no one would want to hire you based on that information.

If you want to check your credit to see how late payments are affecting you, the Credit Report Card will update two of your credit scores every month and grade you on the major credit scoring factors like payment history.

What Constitutes Delinquency?

Payment history has the biggest impact on your credit scores. If you have great credit, a single late payment can result in a 100-point drop in scores. But how late does your payment have to be before you’re considered delinquent?

Paying a credit card bill even a day late could turn into a bit of a mess: You could get hit with late fees, your issuer may raise your interest rate, and there could be other terms of your credit card agreement that allow the issuer to penalize you for missing a due date. The longer you go without taking care of the bill, the more you’ll end up paying in interest, but the 30-day mark is when things really start to unravel.

Once an entire billing cycle goes by and you haven’t paid your previous bill, a 30-day-delinquency code will appear on your credit reports. If you miss a third payment, you’ll be 60 days past due. A fourth unpaid credit card bill gets you to 90 days delinquent, at which point you enter the territory of serious delinquency.

The Impact of Tardiness

For the next seven years after those missed payments are first reported, potential lenders will see delinquencies on your credit reports and take that information into consideration as they decide whether to grant you a loan or issue you a credit card. (You can pull your free annual credit reports to check for delinquencies.)

It may feel like the 30-day-delinquency note on your report is haunting you for a long time, but the good news is that credit information has less of an impact on your scores as it ages.

Still, you want a delinquency on your credit report about as much as you want “always late” stamped on your forehead during a job interview, which is to say you do not want a delinquency on your credit report. Know when your billing cycles end and when you need to pay the credit card company. Even if you can’t pay in full (which is a good habit to develop), it’s much better to send something on time than nothing at all. Setting up automatic payments for your credit cards can be a great way to avoid this issue, but you’ll still want to confirm that the transaction goes through each month.

More on Credit Reports and Credit Scores:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team