How Much Does One Late Car Loan Payment Hurt Your Credit Score?

How Much Does One Late Car Loan Payment Hurt Your Credit Score?

What’s the impact of one late car loan payment? Well, it can be significant. Because payment history is the most important factor influencing your credit score, a late or missed payment on any kind of debt can change your score for the worse. This is especially true for larger payments, and for installment loans.

In many cases, your car loan qualifies as a “larger” loan — and it’s an installment loan as well. For many consumers, the only installment loans with larger balances than a car loan are mortgages and student loans. This means that one late car loan payment can hurt your credit score more than you might think.

The Higher Your Credit Score, the Bigger the Hit

One of the realities of your credit score is that the higher your credit score is, the bigger hit it will take if you are late on one payment. This is true of one late mortgage payment or one late credit card payment as well, when paying 30 days late can drop your score 100 points if you have a score of 780. The drop is less if you have a lower credit score.

The same is true of a late car loan payment. If you have a higher score, you have more to lose. A late payment for someone with good to excellent credit is sometimes seen as an indication that trouble is coming. You are seen as someone who is formerly very financially responsible, but who might become unreliable. On the other hand, someone with an already-poor credit score isn’t exactly acting out of character with a late car payments. It’s in line with expectations, so the hit to the credit score isn’t as large.

How Late Is Your Payment?

In some cases, if you are only a few days late with your car payment, the lender might not report the payment as well — especially if it is an isolated incident. Paying a couple days late on your car loan, unless late payments become habitual, might not have any impact, since it’s up to the lender to report payment issues to the credit bureaus.

The later your payment, the more likely you are to see an impact from your delinquency. Once you hit the 30-day late mark, lenders are inclined to report you to the credit bureaus even if they initially cut you some slack during the first 30 days. And the longer you wait, the worse your credit score is impacted. A payment that is 60 days late will bring your score down further, and a payment that is 90 days late can damage your score further.

If your single late payment is late enough (this usually happens at the 90-day mark), your lender might decide to begin the repossession process. This means that the lender might decide to take your car from you and then sell it, using the proceeds to try to recoup some of the losses associated with lending you the money to buy the car.

Auto Loan with Rate Genius
Looking for an Auto Loan or Auto Refinance?
Rate Genius matches you using a network of over 200 lenders, fast approvals and decisioning. Rates as low as 1.99% Apply Now

What To Do If You Pay Late

A late car loan payment can be serious, so it’s important to get on top of the situation as quickly as possible. First of all, if you are experiencing economic hardship, contact your lender to see if you can work out a deferment or forbearance. If your difficulties are temporary, you might be able to work something out, including a refinance or some type of car loan modification. If the hardship is of a more permanent nature, you might try selling the car quickly so that you can pay off your loan and avoid future hits to your credit score.

If the late car payment is the result of a mistake on your part, you might be able to call the lender and explain. Pay what you owe for that payment as quickly as possible, and then make your next car loan payment on time. It can help to arrange an automatic withdrawal from your account on the day your payment is due in order to avoid late payments in the future. (And remember, ReadyForZero can help you organize and pay off your debt!)

Your best bet, though, is to purchase a car that you can afford. Choose a loan with payments that you can easily afford — even if you end up with a financial emergency. That way, your car isn’t at risk, and it’s easier to maintain your good credit.

Image credit: sergign

Receive updates:      
You can always unsubscribe by clicking on the link at the bottom of each e-mail.

  • DAndrea Pratt

    30 day late payment really drop your score BIG TIME…..
    I went from 675 to 577…….so upset because it happened during Gov’t Shutdown. I had no control over this but CarMax does not care. I have never been late like this in the entire 2year and they wont remove this off my credit.

    • Anthony Fergus

      Hello if you are a week late will that also hurt your score?

      • DeAndre Pratt

        No….it has to be 30days late in order to be sent to credit bureaus.

        • frontline squad bx

          Thank you.

      • dave violet


    • D Rant

      That’s what you get for making a deal with Warren Buffet. You, are a sucker.

      • dave violet

        and you are the north end of a mexican bound horse

  • D Rant

    Credit is pointless. You can have a perfect payment record for several years, and suddenly you have problems beyond your control, and your credit is fubar. Pointless. Useless. If you’re worried about your credit, you’re a sucker.

    • dave violet

      credit is gold.unless you want higher rates,southbound horse

  • alma

    i thought my payment was due on the 28th but i called the dealership and they said no it was due on the 26th and tht was on a sunday i have the money just not in the bank will it hurt me ? if i pay today or tmrrw?

  • I know how hard life is but with late car payment is even more harder. I suggest when buying a car or had it installed you should consider some things.

  • Gurpreet Bhathal

    every one start from a good credit score …

  • Barbara

    I would like to know what can be done regarding Car Max reporting my payments as being late. I would make my payments to the dealership which they can could be done, but yet would get calls saying my payment was late. Even pulled my receipt giving them the date my payment was made and they said that they still have not received it although the money was deducted from my account.

  • Maryna

    I’m almost done paying my car off but been making payments late. It’s in repossession status as of right now I’m debating if I should just pay it off or let them take it. My credit score is already crap. Will paying it off help my credit score at all?