We get it. The rules surrounding what stays on your credit reports and for how long can be confusing.
The answer to how long a late payment will stay on your credit reports is typically pretty simple: seven years.
Before you lose all hope and think your road to financial progress has hit an insurmountable obstacle, take a deep breath. Yes, seven years seems like a really long time. But there are steps you can take to improve your situation over time. So let’s dig in and try to understand what your options are and how you can avoid making late payments in the future.
- What is considered a late payment and when does the seven-year time frame start?
- How do late payments affect my credit scores?
- What can I do to minimize the impact of a late payment?
- How can I avoid late payments?
What is considered a late payment, and when does the seven-year time frame start?
There’s no set “rule” that applies to all lenders — frustrating, we know. Each lender decides what is considered a late payment and when to report it to a credit bureau.
In most cases, if your payment is more than 30 days late, the major credit bureaus are notified, meaning the late payment will show up on your credit reports.
A late payment, also known as a delinquency, will typically fall off your credit reports seven years from the original delinquency date. For example: If you had a 30-day late payment reported in June 2017 and bring the account current in July 2017, the late payment would drop off your reports in June 2024.
The same generally applies if you miss two payments in a row. If you had a 60-day late payment reported in June 2017 and bring the account current in August 2017, both late payments would be removed in June 2024.
How do late payments affect my credit scores?
Late payments will have a different impact on each person’s credit scores depending on the situation. That said, there are some general rules that can help you determine the severity of the impact.
- First off, a longer delinquency will have a greater negative impact on your scores than a shorter delinquency. Assuming everything else is equal, a 90-day late payment can hurt your scores more than a 30-day late payment.
- The number of delinquencies on your reports matters, too. Usually, more delinquencies result in a more significant negative impact to your scores.
- A delinquency will have the largest impact on your credit scores when it’s first reported. However, as the delinquency ages, the impact on your scores should decrease. The length of time your scores take to recover may depend on any other negative issues that might be affecting them.
It’s important to remember that each credit bureau has its own way of evaluating your information and assigning you a credit score. A late payment could have a more significant impact on one score than on another, which is one reason why your scores may vary between credit bureaus.
Is payment history a big factor in my credit scores?
Your payment history is a big deal. In the FICO® credit scoring model, payment history accounts for roughly 35% of your total FICO® credit scores.
What can I do to minimize the impact of a late payment?
First things first: If your bills are past due, the sooner you can pay them off, the better. As we noted above, the damaging effects of a late payment on your credit scores can increase if you let the delinquency drag on.
But say you want to go a step further and try to actually remove a late payment from your credit reports. There are several ways you might try to go about this, and they differ depending on the particular situation.
- Write a goodwill letter. There’s no guarantee it will work, but you can try writing a goodwill letter that explains your history with the lender, your situation and the fact that you take responsibility for the error. In some cases, this may be enough — but don’t count on it. You may have better luck with this method if you have an otherwise stellar history of making payments on time.
- Negotiate. Another potential way to remove a late payment is negotiating with your lender. Your lender may remove the negative mark if you agree to a partial settlement or to pay off the debt in full. If you reach an agreement, make sure to get it in writing.
- Dispute errors on your credit reports. If you see a payment on your credit reports that was incorrectly marked late, you can dispute the error with the credit bureaus. You have the right to challenge errors on your reports, and if a credit bureau can’t verify the accuracy of the information on your report, it must remove that information. You’ll also want to notify the appropriate lender to explain that you’re disputing the information provided to the bureau. Many lenders specify an address for disputes.
Credit Karma offers free credit reports from two of the major credit bureaus, TransUnion® and Equifax®. You can dispute an erroneous late payment on your TransUnion credit report using Credit Karma’s Direct Dispute™ feature. To start, simply click on the account with the error and look for Direct Dispute™ in the details of the account.
How can I avoid late payments?
Avoiding late payments can be easy if you set up a plan and have the resources to cover your expenses. One tactic you can use is set up automatic payments to pay the minimum amount due each month so you will never be late. You can always opt to pay an additional amount at any time.
Of course, not everyone likes having automatic payments taken out of their bank accounts. If that’s not your style, you can simply open your favorite calendar app and set recurring reminders to pay each bill before the due date. Just don’t forget to add a reminder each time you open a new account or when your payment date changes.
Another way to reduce the possibility of missing a payment is reducing the number of bills you pay each month.
Rather than juggle multiple credit card payments each month, you may want to explore whether a balance transfer credit card could help you consolidate high-interest credit card debt into a single card with a single bill. Alternatively, if a balance transfer credit card isn’t the right choice for your situation, a personal loan may be an option to help lower your overall debt’s interest rate and consolidate your bills into a single payment. In the end, you’ll have fewer payments to keep track of each month — and you may even reduce how long it will take to repay your debt.
As we discussed, late payments stay on your credit reports for seven years. But the details about the impact to your individual credit scores can get a little confusing.
To avoid future late payments, you can set up automatic payments on your accounts for the minimum amount due. Of course, if a late payment is erroneously reported on one or several of your credit reports, you can dispute it to (hopefully) get it removed.