Late payments can take their toll on your credit report. While it is important to know how long late payments will stay on your credit report, it is more important to be sure they never get on the report in the first place.
Late payments stay on your credit reports for 7 years in most cases. A single late payment may be nothing to worry about, but a history of late payments can ruin your credit score.
Understanding why late payments are so important
Credit reports themselves are a sort of difficult equation that leads to your credit score. Unless you are involved in that world, it can be difficult to understand a credit report or what matters most when you are looking at it.
When it comes to credit scores, payment history is king. Your payment history makes up as much as 35 percent of your overall credit score. This is because a lender sees your credit score in terms of liability.
In the creditor’s eyes, a person who has a history of late or missed payments is likely going to keep making late payments or missing payments. In that case, they won’t make as much money, so why lend the credit?
Put frankly, a history of late or missed payments is a sign that you are irresponsible with credit, and creditors will see this as a sign that you should not be trusted with more credit.
We know that in reality, mistakes happen. Life piles up, and it can be hard to stay on top of bills. However, if you are serious about repairing your credit, late payments are the first thing to fix.
With that said, older late payments will not factor in to your credit scores as much as they age, especially if you break the pattern and start making payments on time from here on out.
What is a late payment, and when are they reported?
As the name suggests, a late payment is a payment that is not received before the agreed upon date.
However, this specific time frame can change depending on the lender. Each lender has their own rules about what counts as a late payment and if and when they will report said late payment. This is an added layer of confusion, but there is a general trend.
In general, a payment that is more than 30 days past the due date is considered late. The lender will notify the credit bureaus, who will then leave a negative mark on your credit report. This is also the start date for the 7 year time frame.
When exactly will your late payment fall off?
Normally, a late payment stays on your credit report for 7 years. So a late payment from 2019 will fall off in 2026 for instance.
However, there can be some confusion around the nuances of timing here. Say a creditor leaves a 30 day late payment on your credit report in April, 2019. You then bring the account current in May of 2019. That late payment will usually fall off in April, 2026.
The same timing typically applies for a longer delinquency mark on your credit. So if you receive a negative mark in April of 2019 and don’t bring the account current until June of 2019, that late payment will still fall off in April of 2026.
That is not to say you should postpone paying off the delinquency. A longer delinquency can have a much greater impact on your score than a simple 30 day late payment.
Can you remove a late payment before the 7 year mark?
There are some cases where you can remove a late payment mark before the 7 year mark. This is especially true if it is a mistake on the creditors part. In these cases, disputing the remark should get it removed.
However, if the late payment is legitimate, there is no guaranteed way to remove them. If it is a one-time late payment and you catch it early, some creditors may respond to a goodwill letter. This is essentially a letter explaining your good history with a lender and taking responsibility for the mistake while asking them to remove the mark from your credit. Again, there is no guarantee here, but it may be worth the attempt.
If you are serious about repairing your credit score, set yourself up for success. Avoid late payments however possible. Set yourself reminders, set up automatic payments, or even consolidate your debt so you have fewer bills to remember.
Late payments stay on your credit report for 7 years. While a one-off late payment is not going to break your credit score, A history of late payments will definitely have an impact. It is best to avoid late payments before they become an issue.