What happens to your credit score if you pay late rent?

Circumstances may arise where you are unable to pay rent. Maybe you lost your job and don’t have any cash to fall back on in your savings account. Or maybe you suddenly needed to get your car fixed and that drained your bank account.

If you need a little extra time to pay your rent, it’s often not that big of a deal. First of all, many lease agreements include a grace period that gives you a built-in leeway to pay some rent after you’ve paid your rent.

However, if that is not the case and you are a tenant with a history of making payments on time, you may be able to give yourself more leeway by talking to your landlord. For example, if you explain that you have recently experienced a financial crisis, your landlord may agree to give you a few extra weeks to deliver your rent check.

But in general, paying your rent late has the potential to hurt you financially. Therefore, it is important to resolve the issue with your landlord rather than simply being late.

Your credit score may or may not take a hit

If you haven’t paid your rent for more than 30 days, your landlord may report late fees to a credit bureau. From there, your credit score will likely suffer.

Likewise, if your rent is too late, your landlord may decide to refer the matter to a collection agency. This may make late payments more likely to be reported.

However, in some cases, your landlord may choose not to take action on one late rent payment. very That bill is late. Ultimately, landlords can choose whether or not to report delinquency, so if you’re late, you might get lucky.

If you talk to your landlord about why you’re behind on payments (if this is your first time), it likely won’t have a negative impact on your credit score. If you pay your rent on time and have a one-off situation where you can’t do so for a month, your landlord won’t be dumb about it and report it right away.

If you still have time left on your lease, remember that it is in your landlord’s best interest to maintain a good relationship with you. So, your landlord may not only be doing you out of the goodness of his heart, but also doing you a favor to make sure things run smoothly during your lease.

You may be struggling financially in other ways

If your credit score drops, it may be difficult to borrow money the next time you need it, whether in the form of a loan or a new credit card. But even if late rent payments don’t damage your credit score, they can hurt you financially in other ways.

First, some lease agreements require financial penalties if rent is paid after the due date and grace period. So you may want to look into the additional costs.

Second, if you don’t pay your rent consistently, your landlord is unlikely to renew your lease. So you may end up losing your home. Additionally, when applying for a new lease, it is common for landlords to contact previous landlords as references. If you are looking to buy a new home and have a history of late rent payments, your rental may be denied because your previous landlord will be quick to report your history of late payments.

To be clear, being late does not necessarily mean this will happen. once. Rather it is pattern If you are late, you are more likely to get into trouble.

All in all, one late rent payment that goes unreported may not cause any damage to your credit score. Be honest with your landlord and reach out once you realize you can’t send that check on time because the news may not be reflected on your credit report.

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