How Quickly Do Banks Report Late Mortgage Payments to Credit Bureaus?

by KC Hernandez
Failing to pay your mortgage on time risks damaging your credit.

Even if they don't lead to foreclosure, missed mortgage payments can devastate your credit score. One missed payment may diminish your score by less than 100 points, but it remains on your credit for seven years. Your score takes an additional beating when you miss more than one payment in a short amount of time. You must catch up within one month to keep banks from reporting a late mortgage payment to credit bureaus.

Running A Bit Behind

It's okay to send in a late payment, as long as it gets to your lender before you hit the 30-day past-due mark. Lenders usually give you a grace period of about two weeks after the due date. After the 15th, or so, of the month, however, it assesses a late penalty which usually equals about 5 percent of the mortgage payment. The exact late payment fee can vary by state and lender. At this point, you're on your lender's radar and may even begin to receive letters and calls requesting immediate payment. While this collection effort may be scary and annoying, your lender won't report you to the credit bureaus until you are at least 30 days behind.

When It Really Matters

Getting your payment in before the 30-day-late payment deadline is a must in order to protect your credit record. For example, most mortgage payment coupons state that payment is due on the first of each month. As such, you must get your payment in to the lender before the first day of the following month to prevent your lender from reporting a 30-day delinquency. Whether arriving by electronic or wire transfer, automated payment or by mail, the lender must receive the payment before the 30th day. Lenders report new information, such as a 30-day late payment, once every month.

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Treading Muddy Waters

Lenders can muddy the waters by reporting a late payment even if they receive it within 30 days after it's due. That's because lenders often report payments as late if they fail to receive the money on or before the final business day of the month, Lending Tree says. You might end up with a late payment reporting if you remit payment within 30 days but the month ends on a Saturday or Sunday, or if you pay at the end of February, which has fewer than 30 days. Although a late February payment can shave several days off of the typical 30-day deadline, months with 31 days can buy you an additional day. A late payment received on the 31st "probably wouldn't be reported as late," Lending Tree says.

That Was Fast

Lenders report delinquencies monthly and credit bureaus follow suit by adjusting your scores immediately afterward. As such, you can start seeing the negative effects of the late payment within two months. You can also expect an initially lower score, which improves with time and on-time payments. You may even experience negative reactions from other creditors. They may reduce your credit limits, stop extending your limits and rescind recent offers for credit as the result of a missed mortgage payment.

References

About the Author

K.C. Hernandez has covered real estate topics since 2009. She is a licensed real estate salesperson in San Diego since 2004. Her articles have appeared in community newspapers but her work is mostly online. Hernandez has a Bachelor of Arts in English from UCLA and works as the real estate expert for Demand Media Studios.

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fica social security tax rate 2014how to calculate interest rate in exceltax on savings bond interestwisconsin telefilehow to calculate cgthow to evict a tenant in vafidelity penny stocksstatute of limitations child support texasverizon graduate programtrustor meaninginterspousal transfer deed californiahow to get a replacement w2dea numbers lookupvehicle leasing ratesillinois food stamp programatms that take ebt cardsencrypted credit card definitioncollecting widows benefits social securitypension lump sum payouthow to compute contribution marginis fha insurance tax deductiblehow to get marginal revenuehow are ira distributions taxedhud housing single motherslost pnc credit cardactivate boa credit cardfha 203 bgovernment grants for bracesinstructions for form 1040xirredeemable debtcommingled fundscan i be sued for medical billshow long does a amended tax refund take to receivequota rents1040x paymentmortgage loan bad credit first time buyer401k loan after leaving companyarmy reservist pay401k first time home buyerhow to write cents on a cheque in canadatransfer money from one visa gift card to anotheris it illegal to overdraw your bank accountfile taxes with last pay stubjoint tenancy versus tenancy in commonbuying a car tax deductiondeadline ira contributionwood pellet vs wood stovew4p form1099 c tax ratestocks and shares indexcashing savings bondwhat to do with form 1099 rco signer on bank accountscottrade dividend reinvestmenttrack usps priority mail without numberbrand formularyirr trustprepaid mastercard amountsnyc income tax bracketsaverage gap insurance costh&r block tax refund advanceusaa renters insurance claimcan the government garnish wages for student loansmoneygram charges for sending moneyform 540ezhow to calculate dividend per shareallstate insurance claimsamscot check cashing ratesapply for survivor benefits onlineare pension lump sum payments taxablecan i do a quit claim deed myselfday care deductionencumbered assetcash accruals formula

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