A car payment is considered late when you miss the due date of payment. For late payment, your lender can levy a late fee. You can pay the missed car payment plus the late fee prior to the next due date of the next month. Lenders don’t report missed payments to credit bureaus before 30 days.
Your credit score will not be impacted if you pay missed car payments within 30 days of the due date. That will prevent your credit rating from plummeting instantly. But you need to ensure that you stay current on car payments to build credit faster.
A car payment will not be considered late if it is paid within 10 days of passing its due date. You will not even be charged a late fee for the same. But once the 10-day grace period passes, the lender will charge a late fee for the missed car payment.
Besides, the grace period may vary from lender to lender. It is advisable to read the car loan contract if you are likely to miss a car payment. It will let you know how much extra time you will get for paying the missed car installment without a late fee.
Late car payments can badly impact your credit score. Even a single missed car payment can stay on your credit report for as long as seven years. Deferment of some car loan payments, which you are likely to miss, will not affect credit ratings. But multiple missed car payments can.
Besides, the length of time of missed car payments is important. If you have been missing car payments for a long, it can negatively impact your credit report. You need to make sure that you will pay the installments on time. It will not harm your credit. Repaying debt on time ensures improvement in credit scores.
When you miss a car payment, you will have to pay a late fee. Lenders can even repossess your vehicle if you have several missed payments. You do have 30 day time period to pay the dues. But after that, the missed payment will be reported to credit bureaus. Missed car payments can stay on the credit reports for seven long years.
In case, you have got your car loan co-signed, a missed car payment will also affect the co-signers credit score. The co-signers credit rating will drop because you have missed a car payment. So, make sure you pay car installments regularly.