Delinquency refers to the situation that arise where a borrower is more than 30 days late with a scheduled payment date.

Care must be taken to avoid confusing delinquency with default.

The default status is usually reserved for borrowers who are over 90 days late with payment, and the lender gives it a status of default.

Delinquencies are very common with consumer products like credit cards, personal loans, and home loans.

And it often happens due to honest mistakes made by borrowers.

What’s important is that delinquency is the first step a borrower takes towards default.

So it triggers a lender’s system to alert them of potentially problematic borrowers. Lenders can then take pro-active action to help borrowers solve their problems.

It must be noted however, that delinquencies will be recorded in an individual’s credit report which will negatively affect credit score.

A debt payment that is 35 days overdue will be less damaging to a person’s credit history than one that is late for 65 days.

However, both will still be better than a default.