Late car payments can happen to anyone. Whether you plain forgot to make the payment by the due date, or came up short of cash for the month, you might be concerned about the negative impact on your credit score. Unfortunately there is no definitive answer as to whether or not you will see your score plummet; there are many factors that come into play.
The main factor that determines if the late payment will lower your credit score is if the transgression is reported to the credit bureaus. The typical time span for such a thing to happen is 30 days past the payment due date. However, Barry Paperno of myFICO.com has stated in public interviews that lenders often will wait to report the delinquency until it is 60 days past due. Lender reporting frequency varies from one company to the next, so you cannot predict if your lender will report the action.
If a single late payment is reported to the credit bureaus, then it will result in a decrease of your credit score. A recent report from FICO shows that a single 30-day late payment reported to the credit bureaus will result in a drop of 90 to 100 points from your FICO credit score. The exact score drop amount varies because it is based on other credit factors. These factors include credit history length, delinquency history of other credit accounts and current outstanding balance on the late account.
The good news for consumers is that if you are late on an auto loan payment, you can recover. The hit to your credit report lasts a period of seven years, lessening over that time.
Working to improve your credit rating by paying down existing debt can help to minimize the effect of the late installment loan payment. This, along with time, will help get the credit score back to its pre-late-payment glory.