What It Means
Delinquency means an account is past due: a required payment, usually at least the minimum, wasn't made by its due date. Almost any bill can become delinquent, including credit cards, loans, utilities and property taxesProperty taxA yearly tax your local government charges on real estate you own, worked out from the property's assessed value and the local tax rate. See more. In credit reporting the word has a narrower meaning, because a creditor can report a delinquency to the credit bureausCredit bureauA company that collects information about how people use credit and sells it as credit reports; Equifax, Experian and TransUnion are the three nationwide ones. See more once a payment is at least 30 days past due, and the report then shows how far behind the account fell: 30, 60, 90 or 120 or more days.
Try It: Step Through a Missed Payment, Day by Day
Pick how far past due a payment is. The stages come from Experian's delinquency timeline; your lender's own rules may differ.
Late, not yet reported. The lender may charge a late fee. Paying now probably keeps it off your credit report.
Can be reported. Most lenders report a payment as delinquent once it's 30 days late, and the mark can stay seven years.
60 days past due. A second missed payment can be reported too, doing more damage, and collection calls and letters usually pick up.
Often treated as default. Many lenders consider 90 days past due a default, which can lead to a lawsuit, repossession or foreclosure.
Charge-off and collections. The account may be charged off and sent to a collector. Equifax says charge-offs generally come 120 to 180 days after delinquency.
At every stage, calling the lender is worth doing. Paying later doesn't erase marks already reported.
How People Say It
- "The account went delinquent while I was in the hospital."
- "It says 60 days past due on my report."
- "Call them before it hits thirty days."
The Breakdown
A short example. Marcus has a car loanCar loanAn installment loan used to buy a vehicle, repaid in monthly payments over a set term, with the vehicle as collateral. See more and a credit card. After his hours are cut in June, he pays the car loan and lets the card slide, planning to catch up in a month. July's payment goes too, and by September the card is 90 days past due.
Where it goes wrong. The card was delinquent from the first missed due date, but the real damage started at 30 days, when the issuer reported it. Each extra month added a worse mark: 60 days, then 90. Experian says many lenders treat 90 days as defaultLoan defaultFailing to repay a loan as the contract requires, usually after missed payments, which lets the lender use stronger ways to collect. See more, and from about 120 days an account may be charged offCharge-offWhen a lender writes an unpaid account off as a loss and closes it; you still owe the money, and the mark can stay on your credit report for up to seven years. See more and passed to a collector. When Marcus finally pays, the account becomes current, but the 30, 60 and 90 day marks stay on his reports for up to seven years from the first missed paymentLate paymentA payment that reaches the lender after its due date; on credit reports, one that's 30 days or more past due. See more.
What to watch for
- The first due date you miss. Before 30 days it's usually a late fee only.
- A call to the lender before the due date, or as soon as you fall behind, to ask about hardship options such as a lower payment.
- Car loans in particular: Experian notes some auto lenders repossess at 60 or even 30 days late.
- Federal student loansFederal student loanA student loan made by the U.S. Department of Education, with a fixed rate set by law and federal repayment plans and protections. See more, which follow their own, longer timeline; Buhata's loan default page covers it.
Good to Know
Experian explains that a delinquency stays on your credit reportCredit reportA record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you. See more for up to seven years from the original delinquency date, the first missed payment in the run, even if you later bring the account current. If the debt is charged off and sold or sent to collections, the original account and the collection account should both drop off within seven years of that same date. Lenders set their own grace periods and fees, so read your agreement for the exact point a payment counts as late.
FAQ
When is an account considered delinquent?
As soon as a required payment is missed, the account is past due. For credit reporting, Experian says lenders generally report it once the payment is 30 days late.
What's the difference between delinquency and default?
Delinquency means you're behind on payments. Default is the later stage when the lender treats the loan as broken, which Experian says many lenders do at 90 days past due, though your contract sets the exact terms.
Does paying a delinquent account remove it from my credit report?
No. Bringing the account current stops new late marks, but the earlier ones stay for up to seven years from the original delinquency date, with less effect over time.
Do It in Buhata
Bills (Plus), Reminders
With Plus, put each loan and card in Bills with its due date, and set a Reminder a few days before it so a short month doesn't turn into a 30-day delinquency.
Open BuhataRelated Terms and Categories
- Late payment
A payment that reaches the lender after its due date; on credit reports, one that's 30 days or more past due.
- Payment history
The record in your credit reports of whether you paid each credit account on time, late or not at all; it's about 35% of a FICO Score.
- Charge-off
When a lender writes an unpaid account off as a loss and closes it; you still owe the money, and the mark can stay on your credit report for up to seven years.
- Loan default
Failing to repay a loan as the contract requires, usually after missed payments, which lets the lender use stronger ways to collect.
- Debt collector
A person or company that collects debts owed to someone else, such as a collection agency, debt buyer or collection lawyer, limited by the FDCPA.
- Late fee
A charge added when a payment arrives after its due date, set by the card agreement, lease or contract and limited by federal or state rules.
Sources
Experian, "What Is a Delinquency on a Credit Report?"; Experian, "When Does Debt Become Delinquent?"; Equifax, "What is a Charge-Off?"
- www.experian.com/blogs/ask-experian/what-is-a-delinquency-on-a-credit-report
- www.experian.com/blogs/ask-experian/when-does-debt-become-delinquent
- www.equifax.com/personal/education/credit/report/articles/-/learn/charge-offs-faq
Last updated .