Your credit card company only requires a small amount of your monthly balance. This minimum payment is the smallest amount you choose to pay back against your credit card bill or installment loan while maintaining good standing. 

You may already be aware that your payment history accounts for 35% of your FICO score. It’s also one of the most significant factors affecting your credit score. But is it necessary to make a monthly payment? Does this payment impact your credit score if not paid on time?

Well, this article will talk about what happens if you miss your loans monthly payments and how it can impact your credit score so that you can make an informed decision. 

How Do Your Monthly Payments Impact Your Credit Score? 

A credit report forms the basis for a credit score and contains information about your last payment. The extent of the credit amount is not considered during the credit score calculation. Instead, having a regular, reliable payment history will raise your credit score as long as you make a monthly payment. Your monthly payment amount doesn’t directly impact your credit score. Still, it does affect how much credit you’re using or what is your credit utilization. 

You could lose many points from your credit score if you use more than your credit limit. Though the decrease in your credit score is temporary, if you quickly pay down your balance, your credit score will recover.

When you make the minimum payment each month, your balance decreases slightly, and a high credit utilization rate keeps your credit score from improving. Additionally, your credit score could suffer if you make the minimum payment on your card each month while making additional purchases. Doing that increases your total outstanding balance rather than decreasing it. In contrast, if you make the minimum payments and have a low balance—say, 30% or less of your credit limit—your credit score is secure in terms of credit use.

What Happens if You Miss a Payment?

Based on how delayed your payment is, here is what you can typically expect:

1. Less Than 30 Day Late Payments

It shouldn’t affect your credit score if you pay the account before it’s 30 days overdue. However, you might be penalized for a late fee.

While some lenders may process payments as rapidly as the same day, others could require much more time. Wait to make your payment until the last minute to prevent experiencing processing difficulties.

2. Late Payments of More Than 30 Days

Your credit score may decrease by as much as 180 points when a late payment appears on your credit reports. Customers with higher credit ratings can see a more significant decline than those with lower scores. 

When scheduling your payment, you should only rely on lenders who report late payments once they are 30 days past due. Your credit score may be negatively affected by late payments.

Late Payments of More Than 60 Days

The longer you are in debt, the more your lender will transfer the debt to the debt collector. These organizations are known for their harsh collection methods. You will receive frequent calls from the debt collector, who takes charge of collecting the debts. With secured loans, such as mortgages and auto loans, you face the risk of suffering more extreme repercussions, like losing your home or car. At the same time, the lender tries to make up for their losses.

For How Long Does the Late Payment Show on Your Credit Report?

One frequently asked question about credit scores is how long late payments stay on your report. Let’s examine how long a late payment will remain on your credit report.

A late payment can stay on credit reports for up to 7 years from when it first occurred, even if you get caught up on repayments after getting short. If you don’t pay the payment, it will still disappear from your credit report in 7 years, but you will have to bear the significant fines.

Initially, your lender might charge you a late fee and increase your interest rate to a penalty. A late charge and a penalty APR may be the first actions taken by your lender. The credit card company might cancel your card if you want to stop making payments.


Your monthly payments can significantly impact your credit scores. Remember that you must pay your bills on time while planning your budget to keep your credit score high!