Just How Bad Is It To Pay Your Rent Late?

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Have you ever paid your rent late?

In the moment, it might not seem like a big deal. Maybe you have to pay a late fee, which sucks, but you pay it and move on. Or maybe you don’t see any immediate consequences from your late payment.

But I know better. I was a property manager for several years, so I know exactly how much trouble late rent payments can cause. And I’m going to give you an insider’s look at just how bad it is to pay your rent late.

Here are the potential consequences of late rent payments.

1. Late payments will be recorded and reported on future rental history inquiries.

Property management software keeps track of payment dates. And it 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 property manager will probably contact your current property manager to ask if you have any late payments. 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.

This is one of those consequences that you may not see immediately. You’ll just get a nasty surprise when you apply for your next apartment.

2. You’ll probably have to pay a late fee.

Most rental agreements include a late fee clause. You might have to pay a late fee if you’re even 1 minute late. Or you might have a grace period of a day or two.

Side note: just because you have a grace period doesn’t change the due date. Say your rent is due on the first of the month, but you have a grace period until the third. If you pay on the second, you won’t have to pay a late fee, but your payment will still be flagged as a late payment.

The amount of your late fee varies greatly by state law and even by individual property management companies. It could be a flat fee or a percentage of rent. It could even be a daily fee, adding up every single day until your rent is paid in full.

Late fees are such a horrible waste of money! Pay your rent on time, and use that money for something better.

3. The eviction process could start sooner than you’d think.

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 first, and there’s often a grace period until the third. On the 4th day of every month, the property manager (yep, me!) would have to send a Three-Day Notice to Pay or Quit to anyone who hadn’t paid yet. This meant that the renters had just three days to pay the rent plus the late fee or to move out. If they did neither, the legal eviction paperwork was filed on the eighth of the month.

The eviction process can take a little time depending on the courts’ caseloads. But at this point, you would have an eviction proceeding on your rental history, which could easily prevent you from being approved for future apartments.

4. Your credit could take a hit.

The effect of late payments on your credit score is another consequence of late rent payments most people just don’t think about.

If your property management company reports your late payments to the credit bureaus, your credit score will take a hit.

And just how bad is it if your credit score declines?

• You could be denied future apartments based on unacceptable credit.
• You could be denied future loans: home loans, auto loans, student loans, and even credit cards.
• Even if you can get approved for future loans, the lower your credit score is, the higher your interest rates will be. This means you’ll have to pay more money for a loan than you would if you had good credit. I ran some numbers and found that bad credit could cost you about $86,000 in extra interest on a home loan!

These consequences are long-lasting. Late payments typically stay on your credit report for seven years!

What to do if you can’t pay your rent on time.

Clearly, it’s important to pay your rent on time. But what should you do if you just can’t?

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. I can’t promise they’ll be able to help (property managers have to be exceedingly careful about making exceptions for renters because granting an exception to one renter but not another could be interpreted as discrimination against the renter who didn’t get the same exception), but it’s worth asking.

If it’s a long-term affordability issue: You need to make a big life change. Take on a roommate, get a second source of income, or even move to a more affordable place.

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 is no easy task, and will prove to be a hurdle in the future. Make sure to pay rent on time to avoid any potential problems in the future.

PS: This post was written for, and originally appeared on, Zumper.com. If you’re looking for apartments or tips on making the most of your apartment living, check them out!