How Long Do Late Payments Stay on Your Credit Report?
Have you ever forgotten to pay a bill? It happens.
You might have been out of the country, or away from home, your statement might have gotten lost in the mail, or you might have had a lot on your mind.
While a late payment can bring your score down, it won’t stick around forever. Here’s what you need to know about late payments and what you can do to fix any damage they cause.
What Is A “Late” Payment Exactly?
If you’ve missed a payment or paid a little bit late, we have some good news for you. Credit bureaus look at late payments differently compared to credit card companies or other lenders.
When you miss a due date by a day or even by just a few hours, credit card companies, utility companies, and so on are likely to slap on a late payment fee.
You might be able to call and beg them to remove that fee, but many will expect you to pay it.
The credit bureaus who are in charge of putting together your credit reports, don’t care if you’re a day late or even a week late on a payment. A late payment, in the world of credit reports, isn’t late until it’s 30 days past the due date.
So, you’ve got some time to pay your bill before it starts affecting your credit.
That said, if you do have a late payment that’s more than 30 days past due, it can seriously mess up your credit score. Paying late can have a particularly significant impact on your score if you have a higher score via Equifax.
For example, if you have a score around 780 and you have one 30-day late payment, your score can fall as much as 110 points.
Usually, the later the payment, the more significant the effect it has on your score. Paying a bill 90 days late will do more damage to your score than paying a bill 30 days late.
How Long Does a Late Payment Stay on Your Credit Report?
You’ve missed a payment, and the damage has been done. Now, how long are you going to have to live with the results?
The late payment will be visible on your credit report for seven years from the time it happened. After seven years, the late payment will drop off of your report.
While a late payment will stay visible on your credit report for seven years, the good news is that it won’t affect your credit score for that long.
You can work on rebuilding your credit score well before the seven years are up, by paying on time.
Can You Remove a Late Payment from Your Credit Report?
You can get a late payment taken off of your credit report before the seven years are up. One reason why a lender might remove the late payment is if it made a mistake.
The lender might have reported the information inaccurately so that the late payment showed up on your report.
Reviewing your credit reports on a regular basis will help you detect any mistakes early on so that they are easier to report and correct.
Sometimes, lenders are willing to extend a lifeline to a customer or help people out when they are in a jam.
If you’ve been going through a tough time, for example, if you lost your job or were dealing with an illness, which led you to pay late, the lender might be willing to forgive the lateness.
Some lenders offer a one-time “freebie,” especially to customers who usually pay on time and who have brought their accounts up-to-date.
In some cases, a lender will remove a late payment if you agree to a payment plan or set up automatic payments with them.
If the above options don’t work, you can work with a lawyer who can take action to get the late payment off of your credit report.
Although seven years can seem like a long time, a late payment on your credit report doesn’t have to get in the way of your financial success.
Lenders are looking at more than just one or two late payments. They want to see that you have a pattern of paying your bills as agreed.
Have you ever had a late payment on your credit report? Let us know what you did about it in the comments.