Delinquency

Delinquency is the early warning stage of debt problems. If a payment due on the 1st of the month has not been made by then, the account is delinquent, even if only by a day. Lenders usually measure it in days past due, such as 30, 60 or 90 days.

The longer a payment stays overdue, the more serious the consequences. A short delay might bring only a late fee. A payment 30 days or more overdue is often reported to credit bureaus, damaging the borrower's credit score. If delinquency continues for a long time, typically several months, the lender may declare the loan in default.

Lenders and regulators track delinquency rates across the economy, because rising delinquencies can signal that households or businesses are under financial pressure.

For a borrower, catching up quickly is important. Paying the overdue amount, contacting the lender to explain and asking about hardship options can often stop delinquency from turning into default.