If you pay your credit card bill late, you face a penalty fee from your credit card company and potentially an interest rate hike. Even more troubling, your credit score suffers, which could limit your ability to qualify for the best credit card rates.
But all is not lost. You can soften the blow of a late payment history on your credit score by getting current on your bills as soon as possible. And under the new federal credit card regulations, your credit card company must terminate the penalty rate increase after six months if you've made all the minimum monthly payments on time during that period.
Here's a look at the impact of late payments and how to turn things around.
Late credit card payments matter
Your payment history is the biggest factor in your FICO credit score, the most commonly used credit rating. Usually credit card companies report late payments in one of several categories -- 30 days, 60 days, 90 days, 120 days, or 150 days late. The longer the payment is overdue and the more frequently you've been late, the worse the impact is on your score.The number of points lost depends on the individual. Generally people with high credit scores have more to lose than people with low credit scores. According to a theoretical example from FICO, a person with a score of 780 would lose 90 to 110 points from a 30-day delinquency, while a consumer with a score of 680 would lose 60 to 80 points.