Late payments can have a major negative effect on your credit score, but how long do they stay on your credit report?
Let's talk about it to help you understand the length of time a late payment stays on your credit report and how it can affect your overall financial health.
How long does a late payment stay on your credit report?
Typically, late payments that are less severe may only remain on your credit report for two years or less.
Depending on the length and the amount, a late payment can stay on your credit report for up to seven years.
The longer it takes for you to pay the bill, the harsher the consequences. If it takes you over 60 days to pay off debt, then it will stay on your report for up to 10 years.
One late payment will typically be reported to the credit bureau after 30 days.
This can damage your overall credit score in the long run, so it's important to understand the implications of a missed payment and plan accordingly.
Payment history makes up 35% of your credit score, so it matters!
What factors determine how long a late payment stays on your credit report?
When you miss a payment or make an error in paying it on time, your creditor will report the delinquency to one of the three major credit bureaus.
The longer you go without remedying the situation and getting current with your payments, the longer it will be reported to all three agencies.
Don't be ashamed to give your creditor a call to work out a payment plan. Don't take an out-of-sight-out-of-mind approach. Creditors want to hear from you, so don't hesitate to call them and explain your situation.
Additionally, each credit bureau has its own internal policies, which may determine how long a late payment will remain on your credit report.
Other factors include the amount of time elapsed between the original due date and when the debt was paid, as well as the credit limit associated with the account.
Determine How Late Your Payment Is
Generally, late payments are divided into three categories based on how late they are: 30 days, 60 days, and 90+ days past due.
A 30-day delinquency may stay on your credit report for up to seven years, while a 90-day delinquency can remain for up to 10 years.
Still, the length of time a late payment will remain on your report can vary depending on the lender.
Some lenders have policies in place that allow them to remove late payments after a certain period of time has passed.
Check with your lender if they will rescind the late payment so it can no longer be reported to the credit bureaus.
If successful, the more recent late payments will be removed from your report, so potential lenders will not be able to see them.
How to Remove A Late Payment From My Credit Report
Now that you understand the length of time a late payment stays on your credit and the factors that determine it.
Let's explore some things you can do to have it removed from your credit report.
Check Your Credit Reports for Accuracy
You have the right to dispute any incorrect or incomplete information and ask that it be removed.
So if you notice any inaccuracies on your reports, be sure to challenge them immediately so that the mistakes can be corrected.
Once a payment is seven years old, it must be removed from your credit report according to FCRA rules.
Yes, the credit bureau can forget, so it's imperative that you check your credit report and report any discrepancies.
Negotiate with your lender.
One of the best ways to get a late payment removed from your credit report is to negotiate with your lender.
Contact them directly and explain why you missed the payment.
If they understand your situation, they may be willing to report it as paid in full or remove it altogether.
Be sure to follow up in writing and make sure there is a clear paper trail to protect yourself.
Use good faith efforts
If you have a late payment on your credit report, you can attempt to remove it by getting a "goodwill adjustment."
The best way to do this is by contacting the creditor directly and politely explaining the situation.
Ask them to consider removing the late payment from your credit report due to extenuating circumstances.
A sincere and appreciative attitude can go a long way toward making a compelling argument in favor of removing the late payment.
This can be done by either phone or mail; you can try one or the other, or both.
Major Take Away
Missing a payment on a credit card, loan, or other installment debt can have serious consequences, such as late fees and, worse, damaging your credit score.
Setting up automatic bill pay can help you avoid late payments altogether, but sometimes we find ourselves in a bind.
Just remember anything we do to our credit because of hard times can be reversed with a little knowledge and patience.