Dealing with delinquent accounts

Man crouching to unload a dishwasher while wondering how to deal with delinquent accounts.Image: Man crouching to unload a dishwasher while wondering how to deal with delinquent accounts.
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Is there anything more annoying than a roommate who leaves their dirty dishes in the sink?

You’ve asked them to wash their dishes before, and they said they would do it, yet they don’t. Then they forget again and a few more dishes are added to the sink. By this point, you’re frustrated, but not as angry as when they then do it a third consecutive time. Ultimately, you move out and tell all of your friends what a horrible roommate they were, and your old roommate’s reputation is ruined.

Dirty dishes might seem irrelevant to your credit reports, but what if the dirty dishes symbolized late credit card payments? Imagine that you’re the annoying roommate to your creditors, who are becoming increasingly frustrated with your delinquency. They might tolerate one late payment and give you a second chance. But if you keep making mistakes, you can ruin your relationship with them, in addition to maiming your credit scores.

What is a delinquent credit card account?

In the credit card industry, any account past due is a delinquent account. But many creditors won’t report an account as delinquent to credit bureaus until at least 30 days after the missed due date. And if you’ve previously had a clean payment history, your creditor might not report the delinquent account until after two consecutive missed payments.

Additionally, there are multiple levels of delinquency that may be reported on your credit reports. A debt can be reported as 30, 60, 90 and then 120 days late. Multiple delinquencies or a longer period of delinquency can affect your credit scores much more negatively. For example, your credit scores could drop as much as 125 points after numerous missed payments are posted to your credit reports.

Also, even after you’ve fully paid off these debts, the missed payment information on your credit reports may still remain for up to seven years, signaling potential irresponsibility to future creditors. So it’s usually in your best interest to fulfill at least the minimum payment due each month, and, if you do end up with delinquent accounts, to eventually pay those off, especially if they’ve gone into collections.

How to pay your credit card bill

How do I remove a delinquent account from my report?

As previously stated, delinquent accounts are typically removed seven years after the date of the original delinquency. Even if the debt is sold to a collection agency, the original date of delinquency is normally when you defaulted on the original creditor. Unfortunately, these accounts don’t always disappear on schedule, so you may have to put in a little extra work to take them off.

If you realize that a reported delinquency wasn’t removed when it should’ve been, you should retrieve a copy of your credit reports from the three major credit bureaus. (You can see your TransUnion and Equifax reports for free on Credit Karma.)

The credit reports might not be identical, so it’s a good idea to know if the delinquency hasn’t fallen off one or all of them. If you believe a credit bureau has included a delinquency that is inaccurate or outdated, you can file a dispute with the credit bureau.

Bottom line

Don’t let the dishes sit. The process might seem tedious, but your credit report will thank you when it’s been cleaned up. If your credit report looks like a dirty sink right now, grab that sponge and start cleaning.