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Does Missing a Car Payment Affect Your Credit Score?
July 1, 2025
Quick Answers
A missed car payment will negatively affect your credit score, as lenders typically report delinquencies to credit bureaus after 30 days.
The severity of the impact depends on your current credit standing; a higher initial score may see a more significant drop from a single late payment.
Consistent delinquencies will compound the damage, severely limiting your access to future credit and favorable loan terms.
What Is Missing a Car Payment?
Missing a car payment occurs when you fail to submit the required monthly amount to your lender by the established due date. This action constitutes a breach of the auto loan agreement you signed when you financed the vehicle. Many lenders offer a grace period, a short window of time after the due date during which you can make a payment without immediate penalty.
Lenders report your payment history to the three major credit bureaus, which is a key component of your financial record. A payment that becomes 30 or more days late is typically reported as a delinquency, which can lower your credit score. Because payment history is one of the most significant factors in credit score calculations, a single late payment can have a notable effect.
How Missing a Car Payment Can Affect Your Credit Score
Missing a car payment can feel like a small slip-up, but it triggers a chain reaction that can significantly damage your credit score and impact your future borrowing ability.
- Initial Grace Period: Most auto loans have a grace period of 10-15 days after the due date. A payment made during this window typically avoids a late fee and won't be reported.
- 30-Day Late Report: Once a payment is 30 days past due, the lender will almost certainly report the delinquency to the three major credit bureaus. This is the first event that directly lowers your credit score.
- Compounding Damage: If the delinquency continues, it will be reported again at 60 and 90 days past due. Each subsequent report causes more significant harm to your score, as payment history is a primary factor.
- Default and Repossession: After about 90 days of non-payment, the loan may be declared in default. This can lead to the lender repossessing the vehicle, a severe negative event that stays on your credit report.
- Collections Account: Following repossession, you may still owe a deficiency balance. If unpaid, this debt can be sent to a collection agency, adding another damaging entry to your credit history for up to seven years.
How Much Will Missing a Car Payment Affect Your Credit Score?
The exact number of points your credit score will drop after a missed car payment depends on several factors. Here are the key things to consider when assessing the potential damage.
- Your Payment History: This is the most significant factor in your credit score, making up a large portion of it. A single late payment can have a noticeable negative impact on this part of your credit profile.
- How Late the Payment Is: A payment that is 30 days late will hurt your score, but one that is 60 or 90 days late will cause more damage. The later the payment, the greater the negative effect on your score.
- Your Current Credit Score: If you have a high credit score, a missed payment can cause a more substantial point drop. Lenders may view this as a new and unexpected negative mark on an otherwise clean history.
How You Can Avoid Missing a Car Payment Affecting Your Credit Score
Contact Your Lender Immediately
Before you miss a payment, reach out to your lender. Many financial institutions offer hardship programs that might allow you to defer a payment or create a temporary plan. This proactive communication can prevent a late payment from ever being reported to the credit bureaus.
Consider Refinancing the Loan
If your monthly payments are consistently a struggle, look into refinancing your auto loan. Securing a new loan with a lower interest rate or a longer repayment term can reduce your monthly obligation, making it more manageable and helping you avoid future delinquencies.
Re-evaluate Your Budget
Take a close look at your monthly income and expenses to identify areas where you can cut back. Prioritizing your car payment within a revised budget can help you free up the necessary funds and ensure you can meet your obligation on time each month.
Ways to Improve Your Credit Score
Your credit score plays a crucial role in your financial life, but the good news is that it isn't set in stone. With consistent, positive financial behavior, it is always possible to improve your score over time.
- Monitor your credit reports regularly. You can get free credit reports from the three major bureaus to check for errors or signs of identity theft that could be hurting your score.
- Establish automatic bill payments. Payment history is the single biggest factor in your score, and automating payments is a foolproof way to ensure you never miss a due date.
- Reduce your credit utilization ratio. Aim to keep your balance below 30% of your total credit limit, as high utilization can signal financial risk to lenders.
- Become an authorized user. Being added to a family member's credit card that has a long history of on-time payments can help you build your own credit history.
- Diversify your credit mix. Lenders like to see that you can responsibly handle different types of credit, such as revolving credit from cards and installment loans.
- Limit hard inquiries. Applying for too much new credit in a short period can temporarily lower your score, so it's best to space out applications.
The Bottom Line
A missed car payment can lower your credit score. Lenders typically report delinquencies to credit bureaus after 30 days, which negatively impacts your credit history and future borrowing opportunities.
Frequently Asked Questions
How long does a late car payment stay on my credit report?
A late car payment can remain on your credit report for up to seven years from the date of the missed payment, affecting your creditworthiness long-term.
Will one late payment significantly drop my credit score?
A single late payment can cause a noticeable drop, especially if you have a high credit score. The impact lessens over time with consistent on-time payments.
Can I get a late payment removed from my credit report?
You can dispute inaccurate late payment entries with credit bureaus. For legitimate late payments, you can ask your lender for a goodwill adjustment, but removal isn't guaranteed.
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