There is some confusion with late mortgage payments and how they affect credit report and FICO score. You have to understand that if a payment has not been received by the due date, mortgage is technically considered delinquent, but a late mortgage payment is not going to harm either your credit report or your checkbook, as long as you are late within 15 day grace period. While all mortgage payments are paid in rears and due on the first of the month, e.g. your February payment is due March 1st, the lender does not do anything if payment is received by March 15.

If you are late on your payment by more than 15 days but less than 30, a late charge of 5% of the payment will be assessed if provided for in the mortgage note, and every mortgage note I have seen had such a provision. So if you make a late February mortgage payment of $1,000 on March 18, you will get a $50 late charge. Nothing shows on your credit report and your credit score does not suffer.

If a mortgage payment becomes more than 30 days late, the loan will be reported to the credit agency as delinquent. You still will owe 5% late charge. Such a late payment will have quite a negative impact on your credit score and stay on your credit report for 7 years. FICO scores will drop by 50 to 100 points, as we explained in What affects credit score, according to FICO.

The 60 day late mortgage payment makes credit scores suffer further. You can expect 75 to 145 point drop. With ongoing foreclosure swamp, you may get a phone call from your lender to see if they can do anything to help with your mortgage, but chances are you won’t.

The 90 day late mortgage payment is where your lender will likely initiate foreclosure proceedings by sending you a notice of default. Your credit score will get very bad, dropping by up to 185 points, but that will be the last thing on your mind. At this point you will have to decide what to do with your house.

One question that readers ask is what’s worse – a late mortgage payment or a late credit card payment. In terms of lost points, a 30 day late on installment loan which mortgage is, normally affects you somewhat more than a 30 day late on revolving loan, which is what credit card is. Few years ago, when everyone tried to buy a house or refinance to get yet more cash out, being late on the mortgage was bad, while lenders would often close their eyes on a late credit card payment. The things have changed drastically however, and now it is a matter of survival for many. Today, with widespread mortgage delinquencies, short sales and foreclosures, you can live in your house for months and months with all the late mortgage payments you want, but a single late payment on a credit card may result in sky-high rate or even loss of it. Moreover, other credit card issuers can follow and raise rates or simply close your accounts. So if you depend heavily on credit cards to finance everyday basics and carry large balances, the last thing you want is to be late on a credit card payment.

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