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How Long Do Late Payments Stay on your Credit Report?

How long do late payment stay on your credit report

“When will these late payments fall off the credit report?”

I know this question has been of concern for a lot of us. We all, intentionally or not, fall in the category of late payments. You know well that the results of late payment are frustrating. In case of late payments, you have to bear late payment fees. But,

Additionally, You will have to take a slap on your credit report, affecting your credit score. It is said that 35% of your credit score depends on whether you have made your payments on time or not.

We are quite fortunate that not all the late marks are red marks on our credit report. Even if there is any red mark on our credit report, it does not stay for a longer time. But, the question remains the same,

“How long do late payments stay on your credit report?”

Let us dig a little deeper on each late payment aspect and review how long we can expect a red mark to remain and affect our credit score.

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Key takeaways about late payments affecting your credit report

  1. Which all payments can we term as late payments?
  2. How does it impact your credit score?
  3. When do these red marks fall off from your credit report?
  4. Is it possible to reduce the impact of late payments on your credit report?
  5. Is there any way to avoid late payments?

After reading each of these sections thoroughly, you will find a way to avoid late payments, I hope.

Which Payments may you Consider as Late Payments?

If I talk technically, a payment is considered late if you pass the due date. Hence, even if the due date is midnight, one minute past midnight is considered a late payment.

If you do not understand the same in-depth, you can check your contract with creditors or telecommunication companies (utility bills). There is a possibility that your due time is at 6 PM and not midnight.

But, once you have passed your deadline, many creditors give you some buffer time before they expect you to pay. Once this grace period is over, your creditor will start charging late payment fees.

However, not all contracts mention this grace period. If there is no mention, it means your creditor will start imposing late fees if you cross a minute past your due date & time.

Since now you know what can be considered a late payment, it’s time to understand how it will affect your credit score.

How will Late Payment Affect your Credit Score?

Many of us forget to pay our bills on time. Fortunately, a late payment does not affect your credit score unless it is 30 days past due. After 30 days, if you still are left to pay your dues, you might fall in one of these caps.

  1. 30 days past due
  2. 60 days past due
  3. 90 days past due
  4. 120 days past due
  5. 150 days past due
  6. Charged-off

When I say charged-off, it means creditors consider it as a loss and forget.

If you are making late payments, you will fall under any of these categories. Your creditor will report to credit bureaus based on these categories. The more you delay on your side, the more it will affect your credit score.

Suppose you fall under the category of 150 days past due. It will have more effect on your credit score than falling under the category of 30 days past due. So, even if you are late in paying your dues, you should pay it off as soon as possible.

When Do such Red Marks Fall off your Credit Report?

how does late payment affect your credit score

If you fall under the category of 90 days past due, the red mark will affect your credit score between nine months to seven years. However, these assumptions are based on how good your credit score was at the start.

You may expect something terrible to happen in your credit report if you are making late payments. Fortunately, if you have made any late payments and do not fall under the category of 30 days past due or any other, it will not affect your credit score.

However, if it falls under any of these categories, you may expect a red mark to stay in your credit report for seven years. It will fall off after seven years.

Suppose there is an error in the credit report regarding late payments. You have the right to submit a dispute (using a credit dispute letter) to credit bureaus.

If your argument is proved, it will be removed from your credit report, and it will no longer affect your credit score.

But you might be concerned about how long it will keep affecting your credit scores, even if the red mark stays in your credit report. Let me clarify it as well.

Late payments create a red mark in your credit report, and it stays for seven years. All your creditors will be able to see it. However, the late payments affect your credit score for some time. It starts affecting less as time goes.

A study by FICO suggests that late payments will affect your credit score between nine months to 2 years if you fall under the category of 30 days past due.

Is There Any Way to Reduce the Impact of Late Payments?

reduce late payments

It is rightly said, 

“When there is a will, there is a way!”

Even if you have made late payments, try not to panic. There are hardly any humans who do not fall under any of these categories of late payment. You may have intentionally or unintentionally made late payments in the past.

Experian’s consumer credit review suggested that 1.5% of all consumers had made late payments, and they fall under the categories of 30 & 180 days. Hence, never get disturbed when you make any late payments.

However, we are here to understand whether there is any way to reduce the impact. Hence, let us concentrate on it and learn how we can do it.

Suppose you have a good track record with your creditors. You have been timely in making the payments. But supposedly, you have missed one. You can request your creditor to wave off the late payment fees and forgive occasional late payments.

Secondly, in such a case, if you can make some payment by the due date and request the creditor to pardon you for some days, it will not have a significant impact on your credit report. The smaller the amount left in your late payment past due, the lesser it will impact your credit report.

Lastly, if you cannot pay a single penny before your due date, you may connect with your creditor and help them understand your situation. They might avoid informing credit bureaus, thus avoiding the significant impact.

Is there any Way to Avoid Late Payments?

late payment

There are several ways if you accept it and follow them. In short, it depends on your intentions. If you have a clear intention to pay off your dues, it will secure you in the long term.

Please follow the following tactics to avoid late payments.

  1. The fastest & most straightforward way to avoid late payments is by signing up for auto payments. You can try setting up your budget for monthly deductions, thus ensuring zero impact on your credit score.
  2. Some individuals extend up to their overdraft limit, and banks avoid making payments further. Hence, for such individuals, instead of keeping auto payment as an option, they may follow old-school tricks of keeping notes either on the calendar or a book to get reminders about the payment.
  3. Some individuals find themselves involved in multiple late payments. They may find it difficult to choose any of the above methods. They might plan to sit and decide with their families to learn their monthly expenses and reduce them, to pay their dues.

Final Thoughts

If you plan to pay your dues on time, you will pay it, no matter how the situation is. However, there are certain situations where you are unable to make payments.

Hence, you may decide to opt for ways I have listed here to avoid severe impacts on your credit score in such situations. You may even trigger yourself to get used to one of the ways to avoid late payments.

If you are confused about what’s next while you are building your credit report, you may connect with credit repair companies. They are the saviors for you while you are in mode of improving your credit report.

FAQ

1. Can you remove late payments from the credit report?

Yes, you can write a letter to a creditor with reasons why you made a late payment. If your creditor agrees, they have the right to adjust your credit report.

2. Do late payments automatically fall off the credit report?

Yes, it does fall off the credit report. It takes seven years to fall off automatically.

3. How long does 90 days late payment affect your credit report?

It will affect your credit report for seven years. However, it will have a lesser effect on your credit report as time goes.

4. Does one late payment affect my credit score?

Even one legitimate late payment will create a red mark on your credit report, affecting your credit score.