What Is Delinquent Debt?

In the world of credit reporting, a debt is considered delinquent when a borrower allows a full billing cycle (typically 30 days) to elapse without making a scheduled payment. Delinquency is typically recorded on your credit reports with one or more of the three major credit bureaus (Experian, TransUnion, and Equifax) and can have significant negative consequences for your credit scores.

Debt Delinquency Timeframe

Here’s how delinquencies of different durations can affect you and your credit:

• 1-29 Days Past Due: Your creditor may charge a late fee.
• 30-59 Days Past Due: The debt may be reported as late to the credit bureaus, negatively impacting your credit. Additional late fees and penalties may be imposed.
• 60-89 Days Past Due: Further damage to your credit and additional late fees.
• 90-119 Days Past Due: Debt may be considered in default, triggering legal action by the lender, including foreclosure or repossession.
• 120 or More Days Past Due: The account may be charged off and sent to a collection agency, causing additional damage to your credit scores.

How Does Delinquent Debt Affect Your Credit?

Even a single delinquency on your credit reports can do serious harm to your credit scores. Payment history is the most influential factor on FICO® Score and VantageScore® credit scores. Delinquencies remain on your credit report for seven years from the original delinquency date, but their impact lessens over time.

How to Avoid Delinquency

While it can be difficult to make all your payments on time, doing so can go a long way toward improving your financial health. Here are some suggestions on how to avoid becoming delinquent on your debts:

• Pay your bills on time: Use technology like phone reminders and automatic payments to ensure you never miss a due date.
• Revisit your budget: Create or refine a monthly budget to better align your expenses and income.
• Sync payment due dates with your payday: Many lenders will move your monthly payment due date upon request.

What to Do if You Have Delinquent Debt

If you have delinquent debt or debt in collections, you should act sooner than later to address the situation and begin rebuilding your credit and financial footing. Here are some steps you can take:

• Contact your lender: Try to work out a plan for getting your account back in good standing.
• Consult a credit counselor: Certified credit counselors can help you get to the bottom of your debts and help you get them under control.
• Consider a debt consolidation loan: Using a loan with a relatively low interest rate to pay down multiple high-interest debts is a proven strategy known as debt consolidation.

The Bottom Line

One or more delinquencies on your credit reports can do serious harm to your credit scores and, unless you catch up on what you owe, can lead to repercussions including lawsuits, repossession, and foreclosure. If you’re facing delinquency on one or more credit accounts, it’s best to reach out to your lender to see about available relief options. If a debt consolidation strategy can work for you, view debt consolidation loans matched to your credit profile.