Late Payments and Other Credit Score Setbacks

Payment history is the largest factor in commonly used FICO scores, so a reported late payment can hurt more than a small change in your credit card balance. If you are struggling to pay, contact the lender before the due date to ask about your options, and set up reminders or automatic minimum payments where they fit your budget.

Using a large share of your available credit can lower your score even if you pay on time, because credit utilization is another major scoring factor. Paying down revolving balances may help once lower balances are reported, but you should prioritize avoiding missed payments rather than using money needed for essential bills.

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An unpaid account may eventually be sent to collections, and events such as a default or bankruptcy can remain on your credit reports for years. The effect depends on your overall credit profile and the scoring model, so focus first on stopping new delinquencies, then review your credit reports for errors and dispute any inaccuracies.

If you plan to finance a car, make every payment on time, reduce credit card balances when you can, and avoid opening several new accounts without a clear need. Our team also offers Smart Strategies to Boost Your Credit Before Buying a Car – eBook Guide for Improving Your Credit Score; for a closer look at the factors involved, read our guide to what damages a credit score the most.

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