What Is a Delinquent Account, and What Can You Do About It?

Chances are you’ve secured a credit card that you use to make your purchases. Using a credit card is fine if you’re able to make your monthly payments by their due date. But there may come a time when you may not be able to make a monthly payment due to personal circumstances and end up with a delinquent account. 

If left ignored, the delinquent account could have a negative impact on your credit score and maybe even lead to your debt going to a collection agency. But what is a delinquent account? Does an account become delinquent even if you miss one payment? Can you fix a delinquent account? And if it shows up on your credit report, is there any way to remove it? 

Below, we’ll explore these questions about delinquent credit card accounts. 

What is a delinquent account?

Credit card accounts are a type of loan. Each time you make a credit card purchase, you’re borrowing money from the credit card issuer and agreeing to repay them.  

Credit card payments are generally due every month on a specific due date. As a borrower, you have the option to either make the minimum payment or pay the full balance each month. 

Making your monthly payments on time helps build your credit score and can improve your overall creditworthiness. But if you fail to meet the terms of your agreement with the credit card issuer you may end up with a delinquent credit card account.

Different credit card companies treat delinquent accounts differently, but it's typical for some penalties, such as late fees or higher interest rates to be incurred. Let’s look at some typical scenarios of the different levels of delinquency that could play out when you have late payments. 

Past due by more than 30 days

A credit card account that is past due by 30 days may get reported as a delinquent account to the three major credit bureaus — Equifax®, Experian® and TransUnion®. And every time you miss a payment cycle, late fees could be added to your balance due. So not only does your credit card delinquency get reported, but you also increase the amount you owe. 

Past due by more than 60 days

If another payment cycle goes by and you still haven’t taken care of the past-due amount, the situation could worsen. Your credit card company could charge you a higher interest rate on future purchases, add more late fees, and report you to the credit bureaus as 60 days late on your past-due payment. 

Past due by more than 90 days

It gets more serious if you let the missed payment linger. Some credit cards may assign your credit card delinquent account to a collection agency. This isn’t a situation you want to get into. 

If you let the missed payment lapse as long as 180 days, credit card issuers may close your account and file for a charge-off. This would typically be the final stage of your credit card delinquency. You’re still on the hook to pay off the full balance, and you’ll be dealing with a blemish on your credit report. 

Credit card delinquencies and your credit score

If you have a delinquent account from missed credit card payments, the negative impact on your credit score could make it difficult for you to acquire a loan or other types of credit. 

When you apply for a loan, lenders will want to know if you’re able to repay your loan and make timely payments. Most lenders will use your FICO® credit score as an indication of your creditworthiness. 

The two major components of your FICO Score are your payment history (35%) and amounts owed (30%). So, missed payments and delinquencies could lower your credit score significantly. 

How can you fix a delinquent account?

Getting behind on your credit card payments can happen for many reasons — job loss, emergencies, lifestyle changes, etc. — and can result in financial hardship. But there are things you can do to resolve the delinquency.

Pay the past-due balance on your credit card

The simplest way to resolve a delinquent credit card account is by paying your past-due balance. This will bring your account current, and then you can continue to make your regular monthly payments when you receive your statements. However, depending on how much you owe, this may not be feasible for you.

Talk to your lender

If you have a credit card delinquency due to financial hardship, it’s best to take action earlier rather than later. Figure out how much you can realistically pay to the credit card issuer. Then, make a phone call to your credit card company, explain your situation and let them know how much you can pay every month. 

Most credit card companies offer hardship programs and are willing to provide some support. This could include lowering your minimum payment, lowering your interest rate or waiving late fees. The terms vary among credit card companies and often depend on your circumstances. 

Make sure you understand the terms and benefits of the alternative payment plan before committing. Most hardship programs help provide a short-term cushion, but it may mean additional costs in the future. For example, even if the credit card issuer reduces your interest rate for a few months, that interest may still accrue on your balance.

Work with a credit counselor

A credit counselor may be able to help you set up a debt management plan. Credit counselors act as middlemen between you and the creditor. They may provide suggestions on how to pay your past due payments, and they could negotiate a repayment plan with the creditor.

Consolidate your debt

Debt consolidation is another option when you want to resolve a delinquent account and pay off your debt. By transferring your credit card debt to a balance transfer credit card or by paying it off with a personal line of credit, you will resolve the delinquency on your current account and be able to work toward paying down the debt.

Can you remove a delinquent account from your credit report?

Unfortunately, delinquent credit card accounts can stay on your credit report for up to seven years, according to Equifax. In most cases, you will have to wait the seven years for the delinquent account to be removed from your credit report. 

However, If you believe there is a mistake on your credit report, you have the right to dispute it. In these circumstances, it is possible to have a delinquent account removed from your credit report.

Avoid credit card delinquencies

Now you know the answer to, “What is a delinquent account?” While there are ways to get your account out of delinquency, you may want to take steps to be proactive and make your monthly payments so you can avoid it altogether. 

If you’re struggling to keep up with credit card payments, consider the Tally†credit card payoff app. It helps you keep track of all your credit cards in one place, automates your credit card payments and offers a lower-interest line of credit to pay down higher-interest credit card debt. 

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.