Deferring a car payment usually does not hurt your credit if the lender agrees to it in writing beforehand

A payment deferral is an agreement between you and your lender to postpone a payment to a later date. If your lender approves the deferral before the payment is due, it typically does not show up as a missed payment on your credit report. The key word is "before"—the moment a payment becomes late without an agreement in place, the damage begins.

The difference between a deferral and a late payment is the paperwork. When you call your lender and ask to skip or delay a payment, they may say yes. If they do, they will usually send you a written confirmation or update your account to show the new due date. That written agreement protects your credit because the payment is not actually late—it is rescheduled. Your credit report will reflect the new timeline, not a delinquency.

However, some lenders report deferrals differently. A few may note on your credit report that a deferral occurred, even though it was approved. This notation does not damage your score the way a late payment does, but it is visible to future lenders. The safest approach is to ask your lender in writing what will appear on your credit report before you agree to the deferral.

Key Takeaways

  • An approved deferral agreed to in writing before the due date does not count as a late payment and will not damage your credit score.
  • A missed payment that becomes late without lender approval will hurt your credit when ready and stay on your report for seven years.
  • Some lenders note that a deferral occurred on your credit report, which is visible to other lenders but does not lower your score the way a late payment does.
  • Always get written confirmation from your lender showing the new due date before you skip a payment, because verbal agreements are not enough to protect your credit.
  • If you cannot reach your lender or they deny the deferral, a late payment is still better than no contact—call when ready and explain your situation.

What happens to your credit if you miss the payment without approval

If a payment is due and you do not pay it, and you have not arranged a deferral with your lender, your credit score will drop. Most lenders report late payments to the three major credit bureaus—Equifax, Experian, and TransUnion—once a payment is 30 days past due. A single 30-day late payment can lower your score by 100 points or more, depending on how high your score was before.

The damage gets worse the longer you wait. A 60-day late payment is reported as more serious than a 30-day one. A 90-day late payment signals to future lenders that you are a higher risk. After 120 days, your lender may refer the account to a collection agency or begin repossession proceedings. At that point, your credit report will show both the late payment and the collection account, compounding the damage.

Late payments stay on your credit report for seven years from the date you first missed the payment. Even after you catch up and pay what you owe, the late payment record remains visible. This is why calling your lender before a payment is due—not after—is so important. A deferral prevents the late payment from ever being reported in the first place.

How to request a deferral and protect your credit

Contact your lender as soon as you know you cannot make a payment on time. Do not wait until the payment is due or past due. Most car lenders have a customer service number on your monthly statement or on their website. When you call, explain your situation clearly: you have a temporary hardship and need to postpone the payment.

Ask the lender three specific questions: (1) Can you defer this payment to a later date? (2) What will the new due date be? (3) Will this deferral appear on my credit report, and if so, how? Write down the name of the person you spoke with, the date and time of the call, and what they told you. Then ask them to send you written confirmation by email or mail.

Do not accept a verbal agreement alone. Lenders sometimes deny that a conversation happened, or a different representative may not honor what the first one promised. Written confirmation protects you if there is a dispute later. Keep that confirmation in a safe place until the deferred payment is made and the account is current again.

If your lender denies the deferral, ask about other options: a loan modification, a forbearance agreement, or a temporary reduction in your payment amount. Some lenders will work with you rather than report a late payment. If none of those work, paying even a partial payment is better than paying nothing, because it shows good faith effort.

The difference between a deferral and forbearance

A forbearance is similar to a deferral but usually covers a longer period. With forbearance, you may skip multiple payments or make reduced payments for several months, and the lender agrees not to report you as late. Forbearance is often used when you face a temporary hardship like job loss or medical emergency.

The main difference is what happens at the end. With a deferral, you typically make up the skipped payment by adding it to a future payment or paying it in a lump sum on an agreed date. With forbearance, the missed payments may be added to the end of your loan, extending the total length of the loan and the amount of interest you pay. Both protect your credit if approved in writing, but forbearance costs more in the long run.

Ask your lender which option they offer and what the terms are. Some lenders use the terms interchangeably, so clarify what will happen to the skipped payments and when you will resume normal payments.

What to do if a late payment is already on your credit report

If you missed a payment and it has already been reported to the credit bureaus, you still have options. First, bring the account current by paying what you owe as soon as possible. A late payment that is paid off looks better to future lenders than one that is still unpaid, even though both remain on your report.

Second, contact your lender and ask if they will agree to a pay-for-delete arrangement. This is not common, but some lenders will remove the late payment from your credit report in exchange for payment in full or a settlement. Get any agreement in writing before you pay. If your lender refuses, do not pay more than you owe just to try to remove the record.

Third, if you believe the late payment was reported in error—for example, you paid on time but the lender recorded it late—you can dispute it with the credit bureau. Contact Equifax, Experian, or TransUnion directly and explain the error. The bureau will investigate and correct the report if the error is confirmed. This process takes 30 to 45 days.

How deferrals affect your loan terms and total cost

A deferral postpones a payment but does not erase it. The money you owe is still there. When you defer a payment, that amount is usually added to the end of your loan, meaning you will make one extra payment after your final scheduled payment. Some lenders instead add the deferred amount to your next regular payment, which increases that payment's size.

Interest continues to accrue on the deferred amount. If you defer a $400 payment for one month, you will owe that $400 plus the interest that would have been charged during that month. Over the life of a multi-year car loan, deferring even one or two payments can add hundreds of dollars in interest.

Despite this cost, a deferral is still better than a late payment from a credit perspective. A late payment damages your credit for seven years and makes it harder and more expensive to borrow in the future. The extra interest from a deferral is a one-time cost; the credit damage from a late payment is ongoing.

When deferral is not an option and what to do instead

Some lenders, particularly subprime or buy-here-pay-here dealers, do not offer deferrals. If your lender refuses and you cannot pay, you have limited options. Skipping a payment without approval will result in a late payment being reported. However, you can still minimize the damage by contacting the lender when ready and explaining your situation.

Ask if they will accept a partial payment—even $100 or $200 toward the $400 due. A partial payment does not prevent a late report, but it shows the lender you are trying, which may matter if you later need to negotiate a settlement or modification. Some lenders are more willing to work with borrowers who demonstrate effort.

If you are facing repossession or cannot pay for several months, contact a nonprofit credit counselor through the National Foundation for Credit Counseling (NFCC). They can negotiate with your lender on your behalf and sometimes arrange a plan you could not arrange alone. This service is usually free or low-cost.

Frequently Asked Questions

Will deferring a car payment show up on my credit report?

An approved deferral usually does not show as a late payment. Some lenders note that a deferral occurred, but this notation does not lower your score. A late payment, by contrast, is reported as a delinquency and damages your credit. Always ask your lender in writing what will appear on your report before you agree to defer.

Can I defer a car payment if I am already late?

It is much harder. Lenders are more willing to defer a payment that is not yet due. If you are already late, the damage to your credit has likely already begun. However, you can still call and ask about a deferral, forbearance, or loan modification. Some lenders will work with you even if you are behind, especially if you have been a good customer otherwise.

How many times can I defer a car payment?

This varies by lender and loan agreement. Some allow one deferral per year; others allow up to two or three over the life of the loan. A few lenders have no limit but may deny repeated requests. Check your loan documents or ask your lender what their policy is before you need to use it.

If I defer a payment, do I still owe interest on that month?

Yes. Interest accrues daily on your loan balance. Deferring a payment does not stop interest from building up. The deferred amount plus the accrued interest is usually added to the end of your loan or your next payment. This is why deferral costs more in the long run, but it still protects your credit better than a late payment.

What is the difference between deferring and refinancing?

A deferral postpones one or more payments without changing the loan itself. Refinancing replaces your entire loan with a new one, usually with different terms and interest rates. Refinancing can lower your monthly payment but requires a credit check and approval. Deferral is faster and does not require a new process, but it does not reduce your payment long-term.