Just How Bad is it to Pay Your Rent Late?

Editor’s Note: This is a guest post written by Michelle Clardie, for www.savingsandsangria.com. This post was updated on 07/21/23.

Have you ever paid your rent late? In the moment, it might not seem like a big deal. Maybe you have to pay a small late fee, but you pay it and move on. Or, maybe you don’t see any immediate ramifications when your rent is late. However, late rent payments can have serious consequences, as they can result in eviction, late fees, and even damage to your credit score. In this article, we will explore the impact of late rent payments on your credit score and offer tips on how to avoid late payments.

Does paying rent late affect your rental history?

Yes, paying rent late can affect your rental history. When you pay rent late, it may be reported to credit bureaus, which can negatively impact your credit score. Additionally, your landlord may note the late payments in your rental history, making it harder to secure future rentals. Consistently paying rent late can also lead to eviction, further damaging your rental history and making it challenging to rent in the future. It’s essential to prioritize timely rent payments to maintain a positive rental history.

The impact of late rent payments on your credit score

Late rent payments can have a negative impact on your credit score, as they can lead to delinquencies on your credit report. While your landlord may not report late payments to credit bureaus, they can use a collection agency to recover unpaid rent. If your account is sent to a collection agency, it can show up as a delinquent account on your credit report, leading to a decrease in your credit score.

Your payment history is the most critical factor in determining your credit score. Late payments can stay on your credit report for up to seven years and have a lasting impact on your ability to obtain credit. Lenders view individuals with a history of late payments as high-risk borrowers and may be less likely to approve their credit applications or offer them favorable terms.

In addition to the impact on your credit score, late rent payments can also result in eviction and late fees. If you fail to pay your rent on time, your landlord may serve you with an eviction notice, which can result in a negative mark on your rental history. Late fees can also add up quickly, making it more challenging to catch up on your rent payments.

What is a rent grace period?

A rent grace period provides a few extra days from the date rent is due for renters to get their payments in, as money transfers and checks aren’t instantaneous. Many states allow for a rent grace period, but not all do. Each landlord can set their own if they so choose, but a standard is 3-5 days after rent is due. Check your lease agreement to see if you have a grace period and are allowed a few additional days to get your rent payment in.

Additional consequences of paying your rent late

Now, what if you don’t have a grace period or it’s already passed? Here are some additional consequences of paying rent late.

1. Negative impact on future rental history inquiries

Property management software (what your landlord might use to manage multiple rentals) keeps track of payment dates. It also keeps track of how many times you’ve paid late. 

This becomes particularly important when you’re ready to move into a new apartment. When you apply to rent a new apartment, your future landlord or property manager will contact your current one to ask about your rental payment history. Every property management company has slightly different standards, but even one late payment can be a red flag. And, if you have more than three in a year, you risk being denied for the new apartment.  

While this is a consequence you may not see immediately, it’ll be quite an unwelcome surprise when you apply for your next apartment.

2. Accruing late fees

Most rental agreements include a late fee clause. You might have to pay a late fee if you’re even a few minutes past the due date. Or, you might have a grace period of a day or two.

Keep in mind that just because you have a grace period doesn’t change the payment due date. For example, let’s say your rent is due on the first of the month, but you have a grace period until the third of the month. If you pay on the second, you won’t have to pay a late fee, but your payment may still be flagged as a late payment.

The amount of your late fee varies by state law and individual property management companies. It could be a flat fee or a percentage of your rent. Flat fees can be charged on a daily basis, meaning your fees add up every single day until your rent is paid in full.

Bottom line: late fees eat up money you could’ve spent on something much more fun, and they can add up very quickly.

3. Risk of being evicted

Eviction law varies by state, but in most states, the eviction process can begin just a few days after the due date.

In California, for example, rent is typically due on the 1st, and there’s usually a rent grace period until the 3rd. On the 4th day of the month, a property manager might send a Three-Day Notice to Pay or Quit to anyone who hasn’t paid rent yet. This means renters have just three days to pay the rent plus the late fee(s) or move out. If they do neither, legal eviction paperwork can be filed as soon as the 8th of the month.

The eviction process can take a little time depending on the local court’s caseload. At this point, though, you’ll still end up having an eviction proceeding on your rental history, which could easily prevent you from being approved for future apartments.

How to avoid late rent payments

What if you can’t pay your rent on time?

Clearly, it’s important to pay your rent on time, but things come up and we’re human. COVID-19, for example, has wreaked havoc on the economy, forcing millions of Americans to file for unemployment over the last year. So, what should you do if you just can’t get your payments in on time?

• If it’s a matter of simply forgetting to pay on time: Create automatic transfers from your bank to your property manager so you never have to remember to pay again.
• If it’s a short-term cash flow issue: Talk to your property manager. We can’t promise they’ll be able to help (property managers have to be exceedingly careful about making exceptions for renters), but it’s worth asking. If you typically get paid a few days after your rent payment is due, see if you can alter the date of your payment so you have the money to make it on time. 
• If it’s an affordability issue: You may need to make a change. First, try talking to your landlord about lowering your monthly rent. If that proves fruitless, take on a roommate, get a second source of income, or consider moving to a more affordable place.

Your local or state government might have information about rent relief programs or resources to help with rental assistance. Contact the United Way at 211 and they can connect you with organizations that may be able to help.

Next steps

Start the conversation early with your landlord so they aren’t caught off-guard by a late rent payment. They might even be willing to work with you and remove your payments from their property management software so they don’t continue to impact your credit score. You can write them a letter asking for lower rent for a limited time. 

Following these tips will help you pay your rent on time so you don’t have to suffer the harsh consequences of late rent payments. Renting an apartment with bad credit isn’t impossible, but it’s no easy task, and will only prove to be a hurdle. Make sure to pay your rent on time and avoid any potential problems. 

Frequently asked questions about paying rent late

Final thoughts

Paying rent late can have a negative impact on your credit score, as well as result in eviction and late fees. It’s essential to take steps to ensure that you never miss a rent payment, including creating a budget, setting up automatic payments, communicating with your landlord, and using a rent payment service. By taking these steps, you can avoid late payments, protect your credit score, and maintain a positive rental history.

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