If you make a mortgage payment within the grace period, your lender will not report you to a credit-reporting agency, and thus your credit score will not be affected. If you make a payment after the grace period expires, your lender might not immediately report a late payment. However, fees and unpleasant communications from the lender might begin at that point. It's important to understand exactly when your monthly due date is, and how long your lender's grace period is.
Late Payment Within the Grace Period
Most lenders set the due date as the first of each month; however, they offer a standard grace period of 15 days. A payment made on or before the 15th of the month will be treated as though it had been made on time. No fees will be charged, and the borrower will not be reported to a credit agency. This is done to accommodate the fact that not everyone is paid on the same schedule.
Late Payment After Grace Period But Before Thirty Days
Although banks normally don't report a missed payment to the credit-reporting agencies until it is 30 days or more past due, they usually assess a late fee to the mortgage account after 15 days. Lenders generally also contact the past-due borrower, via a combination of letters and phone calls, in an attempt to get the account current before the end of the month.
When Late Payments Will Be Reported
Payments that are late by 30 days or more will be reported to the credit agencies. Because most mortgage companies use the first day of the month as the due date, the 30th day of the month will also be the 30th day late. Some lenders might not report a payment made even on the 31st of the month, but a payment not made before the first day of the next month will be reported as late.
Payments Later Than Thirty Days
Although a payment that is 30 days late can hurt your credit score, the problems get much more serious when a mortgage is not caught up after being one month late. A payment 60 days behind has even more potential impact on your credit score, but between 90 and 120 days is when almost all lenders will begin foreclosure proceedings if the account is not paid current. A foreclosure can drop your credit score by as much as 100 points, in addition to hurting your chances of getting a mortgage in the future — at least until it rolls off your credit report. A foreclosure can remain on your credit for seven years.
Elliott Taylor has been a writer and blogger since 2009. His articles have been published in the "Arbiter" and "Messenger Index" newspapers, as well as online venues. Taylor holds a Bachelor of Business Administration in marketing from Boise State University.