Payments late by 30 to 60 days might not necessarily have a lasting impact on one's credit score although one might have to incur a late fee and fines. Such delays go unreported on the credit report unless they get repetitive and frequent in nature.
The credit score of an individual is their ability to pay back any loan. The score derived statistically based on the person's credit history.
Several parameters contribute towards a credit score, which falls within the good to satisfactory category. These parameters include the following:
While a good credit score indicates the positive financial health of the borrower, a poor credit score does quite the opposite.
Banks, financial institutions, and several other funding bodies assess an individual's financial ability to repay the loans based on their repayment history indicated by the credit score.
The extent of the impact of late payments on the credit score depends upon two major factors. These are:
How late was your payment?
In most cases if the repayment is just a day late, the lender is likely to let it pass without a fine or reporting.
When repayment is delayed by a week to 10 days it is likely that some late fee or interest be charged on the repayment amount. At the same time, the lender may still not report the case to CIBIL or any other reporting agency.
However, if there is a delay in payment of more than 30 days, you will not only be fined but the lender will also report the case to the agency.
Are you a habitual defaulter when it comes to loan repayments?
If your credit history shows you habitually default repayment instalments, lenders will definitely be wary of you. Based on the frequency of default repayments, borrowers are categorised as follows:
Payments late by 30 to 60 days might not necessarily have a lasting impact on one's credit score although one might have to incur a late fee and fines. Such delays go unreported on the credit report unless they get repetitive and frequent in nature.
It is important to know that any payment delayed by more than 90 days can negatively impact your credit score for up to as long as seven years. For anyone who delays payments over 90 days is considered an offender who may possibly repeat the incidence.
Once endorsed in your credit report a delayed payment can affect your credit score as follows:
Delay in Payment in Days | Impact on Credit Score |
Late by 30 days |
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Late by 60 days |
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Late by 90 days |
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Late by 120 days or more |
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CIBIL scores range from 300 to 900 on a scale of bad to good. An ideal credit score is 700 or above. 700 is said to be good in case of secured loans, while unsecured loans require a credit score of 750.
CIBIL Score | What it Means |
CIBIL Score between 700 - 900
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CIBIL Score between 700 - 750
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CIBIL Score between 550 - 700
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CIBIL Score between 300 - 550
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Late payment of one's Credit Card dues or any loan equated monthly instalments (EMIs) directly impacts one's credit score even if it happens once. As mentioned above, lending institutions evaluate an individual's credit risk based on a person's payment history. This factor helps them decide whether someone is worth lending the money to or not.
A long-term history of timely payments confirms the reliability of the individual as a borrower. On the other hand, a history of defaults and delayed payments indicates that the borrower might not be in the position to repay the loan and might end up being an expensive investment for the bank/lending body. Late or non-payments result in negatively influencing the credit history, thereby decreasing an individual's credit score.
A low credit score is a red alert sign for financial institutions and banks that deem the borrower unreliable. Here is how a low credit score affects the borrower:
In order to maintain a good credit score it is wise to remember that since all transactions and payments against your loan or Credit Card are recorded, always make timely payments, much before the due date.
Here are some tips to ensure you stay on track with your repayments and never miss them:
If you have defaulted on a payment and are wondering how to recover from it, try these methods: