Published: June 6, 2012 Last updated: May 20, 2020 at 15:23 pm

Reader asks:

“Will An Accidentally Missed Payment Hurt My Credit If I Paid In Full As Soon As I Knew?”

Hi Ross,

I have a Royal Bank Avion card which I have not used in several months. In fact, I rarely use my RBC bank accounts, and as a result, I have no reason to check them very often. I don’t recall doing this, but apparently I switched over to paperless statements for all these accounts last Fall.

Yesterday I logged in to my RBC accounts and was mortified to see I had missed a payment on my Avion Visa. Last time I checked, I in fact had a credit balance of $9, and had not used the card since then. However, in early April, the card dinged me their annual fee of $120, and I thus had a payment due on April 30.

As soon as I realized this (yesterday June 5), I transferred in $125 to the card, ensuring I covered the entire balance and any potential interest charges and late payment penalties. Will this late payment show up on my credit history? I pride myself on having a perfect repayment history – it seems a shame to damage it for something so small and so benign.

Thanks, Susan.

Dear Susan:

I’m afraid it will most likely show up on your credit report, since your $125 payment was more than thirty days past the due date of April 30. You can contact RBC Visa and ask them if they would mind cancelling the late payment history in view of the circumstances and your good standing with the bank, but don’t hold your breath – they will likely cite the law and that they have no choice in the matter.

As an aside, I know from years of work in this field, that lenders do have the power to make such changes in your credit history. They just have to be senior enough and also motivated to do so.

What does this mean for you? Well, in the immediate term, your score could drop anywhere from 50 to 100 points – such is the dramatic impact of late payments on your credit history. The RBC Visa would be downgraded from R1 to R2. The good news is that time will be your friend, and with each passing month (and year) the significance of the late payment will fade over time.

Within a year to eighteen months, your score will be back up to its present levels. So consider you incurred a bloody nose and not a broken leg. Thank goodness you spotted this now, rather than say when the card was 90 or even 120 days in arrears. This would have had a far longer-lasting impact on your credit score.

This is but one example of the downside of paperless statements. Another downside, which can have even worse consequences, is if someone fraudulently uses your otherwise inactive credit card, and you have no idea.

My advice is this. If you wish to help the environment and cut down on your snail mail by enrolling in paperless statements for your credit facilities and utilities, you must still take responsibility for your account balances. This means logging in to all your online accounts once a month to take a quick look-see, and make sure you have not missed anything.

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