How to recover from credit card delinquency

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Many of us have accidentally missed a credit card payment, or paid our credit card bill a few days late because we were waiting on a paycheck to come through. This type of credit card delinquency is easy to resolve and might not even affect your credit score — but if you let your credit card bills go unpaid for months, you run the risk of developing the kind of credit card delinquency that could significantly damage your credit.

While it’s relatively easy to recover from a minor credit card delinquency, there is a high cost to ignoring your credit card bills over an extended period of time. Your credit account could be closed and charged off, your debt could be sent to collections and your wages could be garnished. Plus, you’ll end up with a derogatory mark on your credit report that might stick around for seven years.

What is credit card delinquency?

If your credit card payment is overdue, your account is considered delinquent. Most credit card companies do not report a delinquent credit account to the credit bureaus until your payment is over 30 days late — so if you catch your delinquent credit card bill in time and make a payment, your overdue bill won’t have a negative effect on your credit score.

If your credit account remains delinquent for 60 days, not only will your credit score be affected but your credit card issuer may also raise your interest to the penalty APR rate. If your account remains delinquent for 120 days or more, your lender may decide to close your credit card account and send your debt to collections.

How can I check if my credit card bill is delinquent?

If you want to know whether your credit card bill is delinquent, log into your online account or call the customer service number on the back of your credit card. You’ll be able to check your payment history and confirm whether or not you have any overdue bills. Your lender will also contact you—by mail, email, text or mobile alert—when you are late on a payment, so you may already have received notification of a potential credit card delinquency.

If you discover that your credit card bill is delinquent, make a payment as quickly as possible. If this is your first delinquency and you are less than 30 days late, you may even be able to contact your credit card issuer and get your late fee removed.

How do I pay off serious delinquency?

If your credit account has been delinquent for more than 30 days, you need to prioritize making payments as quickly as possible. Many people have trouble paying off credit card debt, especially when it has started to spiral out of control — but the sooner you can start making payments, the sooner you’ll get out of delinquency and back on track.

If you need help paying off a serious delinquency, contact your credit card issuer. Many lenders have hardship programs, including COVID-19 relief programs designed to assist people who are experiencing financial insecurity due to the coronavirus pandemic. You might be able to get your monthly payment reduced, for example, and you might be able to request a credit card forbearance plan that will allow you to postpone payments for a period of time.

If your delinquent credit card debt has already gone to collections, contact the debt collection agency and try to work out a payment plan. You may even be able to negotiate a debt settlement that allows you to resolve your debt by paying off the majority of your balance — usually between 50 and 80 percent — in a lump sum payment.

What happens to your credit card during a delinquency, is it still usable?

During the early days of a credit card delinquency, you are still able to use your credit card. Keep in mind that if your delinquency extends past 60 days and your credit issuer applies a penalty APR, you’ll be stuck paying higher interest rates on both your outstanding balance and any new purchases you charge to your card.

If the debt delinquency timeline continues beyond four months, your bank or credit card issuer may close or cancel your credit account. This means you will no longer be able to use your credit card to make purchases — but you’ll still be responsible for paying off your unpaid debt.

Will the bank cancel my credit card if I’m delinquent?

If your debt is delinquent for long enough, your bank may cancel your credit card. This is called a charge-off, and it generally happens after 120 to 180 days of delinquency. A charge-off appears as a derogatory mark on your credit report, which means it can seriously hurt your credit score — plus, your debt could get sent to a collection agency and your wages could be garnished to cover the outstanding balance.

Does delinquency hurt my credit score?

Credit card delinquency can hurt your credit score. If you are able to make a credit card payment while your account is less than 30 days delinquent, it is unlikely that your credit score will be affected. However, letting your account go more than 30 days delinquent will have a negative effect on your credit score.

If your debt remains delinquent for long enough, it will eventually appear as a derogatory mark on your credit report. This generally happens after three or four months of delinquency, and it may coincide with your credit card issuer deciding to cancel your credit card. A derogatory mark will do even more damage to your credit score and might prevent you from getting loans or top credit cards in the future, so do your best to pay off your delinquent credit card account before it has the chance to become derogatory.

Will paying off collections recover my credit score?

If your debt has been sent to a collections agency, paying off collections can have a positive effect on your credit score. However, the negative effects of having a derogatory mark on your credit report will still remain.

When and how to remove delinquency from my credit report?

If you have a delinquent credit card debt that has not yet been charged off or sent to collections, making timely debt payments is the best way to reduce the impact of the delinquency on your credit score. Your credit report will still show that you missed a few payments, but a strong history of on-time payments can overcome a brief period of delinquency.

If your debt has been delinquent for so long that it has become derogatory, you can expect that derogatory mark to remain on your credit report for seven years. If old debt has not fallen off your credit report after seven years, contact the three major credit bureaus (Equifax, Experian and TransUnion) and request that they remove the delinquent debt from your credit report.

You may also have a delinquent debt on your credit report that is not actually yours. Believe it or not, one in five consumers discover errors on their credit reports — which is why it is important to request copies of your credit reports regularly and dispute any errors you find. If your credit report includes a delinquent debt that you don’t recognize, get the debt removed as quickly as possible. That way, you can maintain the credit report — and credit score — that you deserve.


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