Late Payments and Your Credit Report
Sometimes, just being a few days late may damage your payment record, and being 30 days late will typically be reported to all three credit bureaus, and may affect your credit score.
Here’s some useful information about late payments and how they may affect your credit report:
Types of late payments on a credit report
For creditors, a single late payment may signify a broken trust. A missed payment can identify you as more of a credit risk than before. That’s why payment history is usually the most heavily weighted factor in calculating FICO® Credit Scores1, accounting for about a third of the formula. FICO® Scores put late payments into various categories, including “how severe it is,” “how recent it is” and “how frequently you’ve paid late.” The more severe the category, the more damaging it may be to your score. Generally, a late payment from many years ago won’t hurt as much as the one reported as currently late.
How to avoid late credit card payments
You likely have a busy life, and sometimes, it can be easy to forget a payment. One solution is to set up an automatic payment from your checking account to be sure you make your credit card payments on time. You can also check with your issuer to see if you can set up text and/or email alerts to remind you when your bill is due. For example, with Discover you can login to your account and navigate to the Manage Alerts page to view your options and set up the alerts that best serve you.
What to do if you are behind on credit card payments
The best solution is to get your account current as soon as possible, which means paying the past-due amount. If you can’t pay the full amount all at once, talk to your creditor to see what options are available. This can be helpful in getting back on track, even if your account won’t be reported as current until the full past-due amount is paid.
How long do late payments stay on a credit report?
If you’re 30 days behind on your payment, creditors can report your late payment to the major credit bureaus. At that point, late payments can stay on your credit report for up to seven years from the date of the original missed payment, i.e. the delinquency date. Even when you’ve paid the past-due balance, late payments can stay on your credit report that long. If you’re able to get current on your account before the 30-day mark, you can avoid having your late payment reported to the credit bureaus, but you’ll still face late fees and potentially an increase in your APR from your creditor.
How to remove late payments from your credit report
Unless a late payment is inaccurate, it is difficult to get a late payment removed from your credit report. If you do see an incorrect late payment on your credit report, you should dispute it right away. The credit bureaus typically have 30 days to review your dispute, and if they agree that the information is inaccurate, they will remove the late payment.
It’s important to look over your credit report at least once a year to see what is being reported. You can do so for free at AnnualCreditReport.com per Federal law (the three credit bureaus will allow you to access them weekly during the COVID-19 pandemic).
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