Everybody knows that sitting on your credit bills for too long can affect your credit rating negatively. However, not many people are aware of exactly how your ratings are affected. Here is a time line for your late payment that will tell you how the credit rating decreases over time. Maybe this will help you to manage your debts better and plan ahead of time.

Up to 29 days

If you are late on credit card payments by less than 30 days, the credit card company will probably charge you a late fee on it. It is better to pay your bill right at this point. That is because the company still hasn’t reported it to credit rating agencies. There is no effect on credit rating for late payments of less than 30 days.

Up to 89 days

If your card payment is late by 30 – 89 days, the credit card company reports it to rating agencies. Even though you are a defaulter now, your score won’t be affected if you pay up within this period. As soon as you pay your bills, your account will be set back to current status and your score will remain the same. However, you will be charged extra late fees of up to $35.

Up to 179 days

If you do not pay your credit card bill for more than 90 days and up to 179 days, you will continually be reported. This can put a massive dent on your credit score. Also remember your late fees also increases, so you are at a disadvantage. You will be sent a few polite messages reminding you to pay your bills. Being even later for your payments may result in more aggressive warnings.

After 180 days

At this point, if you have not paid up, your credit rating suffers badly and your account is charged off. The issuer of the credit card no longer treats you as an asset. The charge-off is probably the worst thing that could happen to your credit rating. You will find that repairing your credit becomes much more difficult now.

Collection

This does not mean that the credit card company stops pursuing you. Your account may now be sent to a professional collection agency. If the company files a lawsuit against you and wins at this point, it will be entered at the public records station for all to see.

You can, however settle with collection agencies and you will be off the hook. If you haven’t paid, you may have to wait for 7 years to get your credit rating repaired, which is a daunting task.