When a loan EMI or credit card payment is overdue by up to 90 days, lenders typically classify that account as a Special Mention Account (SMA). That mark shows up on your credit report and can make it harder to get new loans or cards, because banks view SMA entries as early signs of repayment trouble.
What is an SMA?
Special Mention Account (SMA) is a label lenders use for loans or credit card accounts that have become delinquent but have not yet crossed into the non-performing asset (NPA) category. In common practice the delinquency window is broken down into stages, for example:
- SMA-0: payments overdue for 1–30 days
- SMA-1: payments overdue for 31–60 days
- SMA-2: payments overdue for 61–90 days
Once an account remains unpaid for more than 90 days, lenders usually classify it as an NPA, which has much more severe consequences for future credit access and lender reporting.
How SMA reflects on your credit report
A SMA entry appears on your credit file as a record of late payment or delinquency. Credit bureaus receive updates from banks and financial institutions, so any overdue status is visible to future lenders during their credit assessment. Even a single SMA can lower your credit score and flag you as higher risk.
Why banks may reject new credit applications
Banks and lenders use credit reports to evaluate repayment behavior and default risk. An account marked as SMA signals potential stress in your finances. Because of that, lenders may:
- Reject new loan or credit card applications outright.
- Offer credit at higher interest rates or with stricter terms.
- Request additional documentation, collateral, or a co-applicant.
Immediate steps if you find an SMA on your report
If you discover a SMA entry, take action quickly to limit the damage:
- Contact the lender: Confirm the overdue amount, due dates, and any late fees. Discuss payment options immediately.
- Make the overdue payment: Clearing the outstanding EMI or card amount is the fastest way to stop further deterioration.
- Get written confirmation: Ask the lender to confirm in writing that the account has been paid and that they will update their report to the credit bureau.
- Check your credit report: Monitor your file after payment to ensure the SMA status is updated or removed.
- Raise a dispute if needed: If the lender does not correct the record after you’ve paid, file a dispute with the credit bureau with proof of payment and the lender’s confirmation.
How to reduce the risk of SMA in the future
Preventing overdue payments is the best strategy. Consider these practical habits:
- Set up auto-debits: Use standing instructions or auto-pay to avoid missed EMIs.
- Create payment reminders: Use calendar alerts or mobile banking notifications.
- Build an emergency fund: A small buffer can cover EMIs during short-term income disruptions.
- Communicate early with lenders: If you expect trouble, request loan restructuring, moratoriums, or revised repayment plans before payments are missed.
- Keep credit utilization low: For credit cards, maintaining lower balances helps your score and gives flexibility.
How long SMA stays on your record and how to remove it
An SMA entry can remain visible until the lender updates the record to the bureau. Even after you clear the overdue amount, the history of delinquency may still influence scoring models for some time. Steps to remove or correct the entry:
- Pay the overdue amount and obtain written confirmation from the lender.
- Ask the lender to update the account status with the credit bureau promptly.
- Verify the update on your credit report in the following weeks. If the bureau still shows SMA, file a dispute and attach proof of payment and lender confirmation.
- Maintain timely payments thereafter to rebuild your credit score. Positive behavior over months will gradually offset past delinquencies.
Key takeaways
- SMA is an early warning: It signals up to 90 days of overdue payments and raises red flags for future lenders.
- Act fast: Paying the overdue amount and getting proof from your lender are the quickest ways to limit harm.
- Prevention matters: Auto-pay, reminders, and open communication with lenders reduce the chance of becoming an SMA.
- Monitor your credit: Regular checks help you spot and fix problems before they block new credit opportunities.