Almost Half of Americans Think a Late Credit Card Payment Will Lower Their Score by 10 Points or Less. Here's Why They're Sorely Mistaken

As a consumer, it's important to know how your actions might impact your credit score. That's because the higher that number is, the more likely you are to get approved for a loan or credit card when you want one. Also, if you're approved for a personal loan, you're likely to snag a lower interest rate with a higher credit score than a lower score.

Of the various factors that go into calculating your credit score, your payment history carries the most weight. And your payment history speaks to how timely you are with your bills.

If you're late even once paying a credit card bill or making a payment on a loan, it could have serious consequences. And it's important that you understand the repercussions that might ensue.

One late payment could do a world of damage

We're all human, and mistakes happen. So it may come to be that you're late paying a credit card bill, whether because you forgot about its due date or you didn't have the funds on hand to make your minimum payment.

You might think that a single late payment isn't such a big deal. In fact, in a recent survey by the Consumer Bankers Association, 46% of respondents mistakenly believed the statement, "My credit score can go down a little, by 10 or fewer points," when asked what happens following a single late payment. In reality, the damage could be a lot more severe.

You'd think that if you had a strong credit score, you'd be able to come away from a single late payment relatively unscathed. But believe it or not, people with higher credit scores stand to get hurt more from a single late payment than consumers with lower credit scores. And the reason is that a late payment from someone with a higher credit score is more of a surprise, so that's reflected in the form of a larger credit score drop.

How much might your credit score drop after one late payment?

The impact a single late payment will have on your credit score will depend on a couple of factors, such as what your credit score was to begin with and how late you were with that payment. A payment that's 30 days late is apt to cause less damage than one that's 90 days late.

FICO says that for someone with an excellent credit score in the upper 700s, a 30-day late payment could result in a drop of up to 83 points. For a 90-day late payment, that same consumer could see their credit score drop by up to 133 points. Ouch.

For a consumer with a credit score in the low 600s, the damage won't be as severe, according to FICO. In that case, a 30-day late payment might result in a drop of up to 37 points, while a 90-day late payment might result in a drop of up to 47 points.

Either way, it's important to recognize that being late with a credit card or loan payment is just plain bad news. So it's best to do what you can to avoid that. Keeping tabs on credit card balances and paying attention to due dates is a good way to steer clear of being late. And if you're juggling multiple debts, consolidating them via a personal loan or balance transfer credit card could make them more manageable, thereby reducing your chances of missing a payment deadline.