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What happens to my credit score if I make a partial payment on my debt?
Got debt? How making a partial payment can hurt your credit score
You might assume making a partial payment will help lower your debt balance, but some lenders won't accept them, and you can still face late fees, growing interest and damage to your credit score.
What is a partial payment?
A partial payment is when you pay anything less than the required minimum due on a debt, like a credit card or car loan. anything less than the required minimum due on a debt anything less than the required minimum due on a debtHow partial payments work by debt type
💳 Credit cards
On a credit card, a partial payment means paying less than the required minimum payment. For example, if your credit card bill is $350 and your minimum payment is $40, but you only pay $25 — that's a partial payment. It still counts toward your balance, but you'll likely be charged a late fee or interest. 🚨 Credit impact: Once you’re 30 days past due, your payment is marked as “missed” on your credit reports and stays there for seven years. Your score might also see a drop due to increased credit utilization. 🚨 Credit impact:🚗 Auto loans
Most auto lenders aren’t going to consider a partial payment to be “on time” if you submit it without arranging a reduced payment ahead of time. Depending on the lender’s policies, they might apply your partial payment toward that month’s interest and principal. “Typically, auto lenders have a grace period of 10 to 15 days, so if you don’t pay the remainder during that time, you could be considered past due and have late fees, even with a partial payment,” says Shannon Bradley, NerdWallet’s auto expert. “Interest will continue to accrue on the unpaid balance and, if you haven't paid the unpaid amount within 30 days of the due date, most lenders will report it to the credit bureaus,” says Bradley. 🚨Credit impact: If you miss the full minimum payment, you have 30 days before it hits your credit report to settle up. Auto lenders can legally repossess your car in many states after one missed payment. Repossession shows up on your credit reports as a separate derogatory mark. 🚨 Credit impact: » MORE: What are your rights if your car is repossessed? » MORE: What are your rights if your car is repossessed?🏡 Mortgages
Mortgage lenders will treat a payment that doesn’t cover the fully monthly amount as non-payment. That partial payment will then be returned to you or held in a “suspense account” until the remaining balance is paid. If your monthly mortgage goes unpaid for more than 30 days, it will show up on your credit reports and will remain there for seven years. “Nonpayment on a mortgage is serious,” says NerdWallet lending expert, Kate Wood. “Even one missed payment is going to have consequences for your credit score and can incur a late payment charge from your servicer,” says Wood. “Continued nonpayment puts your home at risk.” 🚨Credit impact: The impact on your score will depend on your starting score. Typically, those with higher credit scores will see greater drops after a missed or late mortgage payment. You want to avoid foreclosure, which can begin at 120 days past due. It’s extremely damaging to your credit. 🚨Credit impact: » NEXT: What to do if you can't pay your mortgage » NEXT: What to do if you can't pay your mortgageHow does a partial payment hurt your credit score?
There are two ways a partial payment can harm your credit score:Partial payments marked missed stay on credit reports for seven years
A partial payment can have a negative impact on your credit score if it's marked as missed or delinquent by the creditor. Typically, a payment is deemed late if it's made 30 days or more after the due date. A missed payment stays on your credit reports for seven years after the account is first reported late. This harms your credit score because payment history is the most important credit scoring factor.Partial payments drive up credit utilization
Credit utilization, or how much of your available credit you're using, is the second more important factor used to calculate credit scores. Partial payments can cause your debt to creep upward, creating vicious cycle that's hard to escape. Paying bills in full keeps your credit utilization ratio lower — ideally you'd like it to be at 30% or less. While the effect of the late payment wanes over time, the lingering mark can be an obstacle to getting credit cards or loans, as well as renting an apartment and getting approved for insurance.Before making a partial payment, contact the creditor
Reach out to your lender and provide advanced notice that you won’t be able to make a full payment and why. You might ask the lender to: Accept a partial payment without late fees To let you skip a payment To lower your interest rate or to change the due date You might also ask if the payment you’re considering will be reported as late. » What's your number? Get your free credit score from NerdWallet » What's your number?What to do if you're having trouble making your payments
Consider consolidating your debt
If you’re juggling multiple debts with different interest rates and due dates, it might be more manageable — and cheaper — to consolidate them into a single payment. A debt consolidation loan replaces multiple balances with one monthly payment. This is a great option if you can qualify for a lower interest rate than what you’re currently paying. Consider a balance transfer card if your debt is on high-interest credit cards and you have excellent credit. With this option, you move your high-interest balance(s) to a card with 0% interest for a certain promotional period, which gives you time to pay down the balance without interest piling up. NerdWallet recommends cards that have low (or no) balance transfer fees, a long 0% promotional period and no annual fee.Be strategic about bills
If you can’t pay all your bills, prioritize housing and other "needs" before moving to secured debts, like a car loan — you don't want a missed payment to put your collateral up for grabs. Next, pay student loans or credit cards because your grace periods might be longer.Ask about hardship programs
If you’ve experienced unemployment, a medical emergency, divorce or natural disaster, your credit card issuer may have a hardship program that temporarily lowers or waives your interest rate and fees. These aren't widely advertised, but that shouldn't keep you from calling and asking. Issuers are more willing to help before you miss a payment, so make that call early.Work with a nonprofit credit counselor
A certified counselor at a nonprofit credit counseling agency can help you build a personalized budget, negotiate with creditors and set up a debt management plan. Look for agencies accredited by the National Foundation for Credit Counseling or Financial Counseling Association of America to make sure the advice you’re getting is legitimateMeet MoneyNerd, your weekly news decoder
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Explore more on About the authors Barroso Amanda Barroso, Ph.D., is a writer and content strategist helping consumers navigate budgeting, credit building and credit scoring. Before joining NerdWallet, Amanda wrote about demographic trends at the Pew Research Center and earned a Ph.D. from The Ohio State University. Her work has been featured by the Associated Press, Washington Post and Yahoo Finance. Published in O'Shea Bev O'Shea is a former NerdWallet authority on consumer credit, scams and identity theft. She holds a bachelor's degree in journalism from Auburn University and a master's in education from Georgia State University. Before coming to NerdWallet, she worked for daily newspapers, MSN Money and Credit.com. Her work has appeared in The New York Times, The Washington Post, the Los Angeles Times, MarketWatch, USA Today, MSN Money and elsewhere. Twitter: @BeverlyOShea. What is a partial payment? How partial payments work by debt type How partial payments work by debt type How does a partial payment hurt your credit score? How does a partial payment hurt your credit score? Before making a partial payment, contact the creditor What to do if you're having trouble making your payments What to do if you're having trouble making your payments Does Paying Bills Build Credit? Does Applying For a New Credit Card Hurt Your Credit? What Factors Affect Your Credit Scores? 7 Ways to Rebuild Credit 7 Ways to Rebuild Credit By Bev O'Shea, Amanda Barroso, Lauren Schwahn How to Build Credit From Scratch at Any Age By Amanda Barroso Credit Score Ranges: What They Mean and How They Work By Amanda Barroso, Lauren Schwahn How to Calculate Your Credit Utilization Ratio By Amanda Barroso What Is a Good Credit Score and How Do I Get One? By Amanda Barroso, Lauren Schwahn