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Late payments generally only make it onto your credit report if they’re late for more than 30 days. Once a payment is late for 30 days, the creditor will likely report it to the credit bureau, where it will stay for seven years from the date of the first delinquent payment.
Because late payments can have a negative impact on your credit score, it’s best to avoid them when possible. Here’s what you need to know about this important topic.
Key Points
• Late payments are typically reported to credit bureaus after 30 days.
• They usually remain on your credit report for seven years.
• Payment history can significantly affect credit scores.
• Negotiating with creditors or disputing errors can reduce the impact of late payments on credit scores.
• Set up autopay, reminders, or change due dates to avoid late payments.
What Is Considered a Late Payment?
Most accounts have a grace period after the due date where the lender will accept payment without any penalty. The exact length of a grace period will depend on the terms of your credit card or other account, but 21 days is common.
After the grace period, your lender may charge a late fee or make other changes to your account. Once your account is 30 days or more past due, your lender will typically report it to the major credit bureaus.
When Do Late Payments Fall Off a Credit Report?
In most cases, it will take seven years for a late payment to fall off a credit report. Even if you bring your account current after the late payment has already been reported to the credit bureaus, it will still show up on your credit report for seven years after the first late payment. This is why one of the top credit card rules is to make payments on time whenever possible.
One exception to this can be paid medical debt and medical debt under $500, but guidelines are in flux, so it can be worthwhile to do your own research on this topic.
How Different Credit Bureaus Handle Late Payments
Each credit bureau has its own proprietary way of analyzing your information and calculating your credit score. A late payment could have a more significant impact on one score than on another. For example, the VantageScore vs. FICOScore currently gives a bit more weight to payment history. This is one reason why your credit score may vary among the different bureaus, and why your VantageScore could be lower than the digits provided by FICO®.
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How Late Payments Affect Your Credit Score
One of the consequences of a credit card late payment is that it will have a negative impact on your credit score.
Your past payment history is one of the biggest factors in what affects your credit score. As such, if you have a significant amount of late payments on your credit report, it will be tough to have an outstanding credit score.
Short-Term vs Long-Term Credit Score Impact
Late payments can impact your credit score in both the short and long term. Short-term consequences can include late fees and potentially increased interest rates from your lender. Long-term impacts of late payments could be a drop in your credit score, difficulty getting loans or credit, and even having the amount you owe turned over to debt collection.
How to Remove Late Payments From a Credit Report
It’s difficult if not impossible to remove a late payment from your credit report — unless it was reported in error.
However, the only way to find out if a late payment is reported in error is if you regularly review your credit report. If you have documentation that shows that you made the payment on time, you can contact the credit bureau and ask them to update your credit score and credit report.
What Are Acceptable Reasons for Late Payments on Your Credit Report?
To qualify as an acceptable reason for a late payment on a credit report, there usually must be unforeseen circumstances beyond your control, such as medical emergencies, job loss, or natural disasters. Administrative errors by the creditor can also sometimes be a valid excuse. Some creditors may also consider billing disputes or legitimate errors as acceptable reasons. You may be able to manage the impact of these kinds of late payments and fend off a credit score drop.
Goodwill Adjustment Letters
If any of the scenarios above apply to you and your credit report, you might write a goodwill adjustment letter. In this kind of letter, which may also be referred to as a late payment removal letter, you request that a creditor who reported your late payment(s) remove this entry from your credit reports. While not guaranteed to work, it could play a role in helping you get rid of the mark that is negatively affecting your credit.
Requesting a Pay-for-Delete Agreement
Another option if you have a late payment on your credit report is to negotiate with the creditor or collection agency. In this case, you are contacting the party you owe money to (usually in writing) and offering to pay a sum to settle the debt and have the negative mark completely removed from your credit report. Again, this method is not guaranteed to work, and there can be legal facets to it, which can add to the complexity of this undertaking.
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What Can You Do to Minimize the Impact of a Late Payment?
Say a late payment pops up on your credit report. Maybe you got busy with work and your family or ran short on cash. Whatever the case, if you’re willing to do the legwork, there are a couple steps you can take that could potentially minimize the impacts of a late payment.
Negotiate
One option you have for minimizing the impact of a late payment is to negotiate with your credit card issuer. This will generally be more effective if it’s only been a short time since your payment was due or if you have not had late payments previously.
For example, your lender may be willing to waive any late fees or penalty interest if you enroll in autopay from your checking account and/or pay any past-due balance. Contact customer service, and see what can be worked out.
Dispute Errors on Your Credit Reports
If it’s been more than 30 days and your lender has already reported the late fee to the credit bureaus, it can be difficult to remove it from your credit report. However, if you have documentation that you made the payment on time, you can contact the credit bureaus to have them update and correct your credit report.
This is why it is important to understand how checking your credit score affects your rating — generally when you are reviewing your own credit report, it does not impact your credit score. Regularly reviewing your credit report for errors and discrepancies is a great financial habit to have.
Catch Up on Payments as Soon as Possible
Another smart move is to address late payments ASAP. This should be a priority to protect your credit score. Many people have moments when they miss paying a bill on time, such as when on vacation or waiting for a payment for a gig job. Stay on top of payment due dates (see below) and, if and when one happens, do your best to take care of it immediately.
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Guide to Avoiding Late Payments
Since it is difficult if not impossible to remove late payments from your credit report once they’re there, the best course of action is to avoid late payments in the first place. Here are a few tips on some of the best ways to avoid late payments.
Set Up Autopay
One great way to avoid late payments is to set up autopay from a checking or savings account. You can customize your autopay payments to cover the minimum amount, the full statement balance, or anywhere in between. You’ll just want to make sure you have enough funds in the attached account to cover the balance.
Set Payment Reminders
If you can’t or don’t want to set up autopay on your accounts, another option is to set up payment reminders. That way, you can get an email or text message a few days before your payment is due. Getting a reminder can help you remember to make the payment on or before its due date.
Change Your Payment Due Date
Sometimes the due date for a particular loan or credit card doesn’t line up conveniently with when you have the money to pay it. You might find that your credit card due date always seems to come a day or two before payday. If that’s the case, many lenders allow you to change your payment due date to one that’s more convenient for you.
Consider a Backup Payment Method
Another way to make sure bills get paid on time is to use a backup payment method. This is typically applicable for bills you pay online or in app, including those you pay on a recurring basis, say with autopay. You can usually go to your account settings or billing management section of a platform you’re using, and add, say, a credit card or bank account to serve as a secondary source of funding should the first one be inadequate.
The Takeaway
Paying your credit card and other debts on time can be one of the best ways to positively impact your credit score. Late payments can be reported to the credit bureaus as soon as 30 days after the due date. Once they’re on your credit report, they will stay there for seven years from the date of the first late payment. Consider your bank’s capabilities when avoiding late payments: The ability to set up autopay, have overdraft protection, and other features can play a role in avoiding this issue as well.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
Can I get late payments removed from my credit report?
Typically, once they’ve been reported to the credit bureaus, you can only get late payments removed if you didn’t actually pay late. If you have documentation that shows that you made the payment on time, you can submit that to each credit bureau and ask that they update your credit score. You might be able to negotiate with a creditor to remove a negative mark, but this is not guaranteed to work.
Is it true that after 7 years your credit is clear?
How long missed payments and late payments stay on your credit report is usually seven years. That means that if you have not had any negative marks or late payments for seven years, you’ll be starting with a fresh slate.
Is payment history a big factor in your credit score?
Yes, payment history is a big factor in how your credit score is determined. While each credit bureau calculates your credit score differently, payment history is typically listed as one of the biggest factors in what affects your credit score.
How many points does a late payment affect your credit score?
There is not a single set amount that your credit score will drop if you have a late payment. Factors include your current credit profile and how late you are with your payment. For instance, being a day or two late is likely to ding your score less than being a few weeks late or missing the payment completely.
Can one late payment stop me from getting a loan?
One late payment could have a negative effect on your loan approval in some cases. Your payment history is the single biggest factor for determining your credit score, and if your score were considered borderline, a late payment could push you into a lower category. That lower credit score range might change the lender’s perspective on your creditworthiness. That said, a late payment is more likely to be a red flag than a dealbreaker.
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