How Long Do Late Payments Stay on Your Credit Report?
According to Gitnux’s survey, 1 in 4 adults never checks their credit reports. If you are among them, the chances are high for you to wonder, “How long do late payments stay on your credit report.” The surprising part is that you are not the only one. Even people who are conscious of their credit reports tend to miss maintaining timely payments.
Being associated with credit services for a few decades, I have come across a handful of people who have had trouble with late payments. The reasons behind their late payments were not the same. But, all had a hard drop in their credit score. TheCreditPros helped such customers carefully handle their credit, and taught others to stay cautious of such issues.
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How Long Do Late Payments Stay on Your Credit Report
Before discussing further the effects of late payments, let’s first have a look at the straightforward answer to this most common question. It takes 7 years for your missed payment records to fall off your credit report. But, as time moves on the negative impact of this starts decreasing gradually. This only counts if you are careful with other payments. If not, you may not easily earn your credit back.
Late Payments Impact Your Credit Scores
Credit card issuers and loan vendors search for a reason to approve your credit applications. They literally expect proof of your capacity to pay back your loans on time. To decide on this, credit issuers rely on a credit score estimated by credit bureaus. This credit score is a three-digit numerical value that is evaluated based on a user’s credit history.
The primary factor of this credit card evaluation is an “on-time payment history.” This factor is the largest part of credit score calculations. So, right from the day you are accountable for your credit, make sure you hardly ever make a late payment.
When Is It Considered a Late Payment
We have talked enough about the effects of late payments. But, are you aware of when it is considered a late payment? Any payment that is 30 days past your due date is considered a late payment. So, even if you missed paying on the due date, you can still pay within 30 days and save your credit from getting hurt. But, you are accountable for the penalty APR (annual percentage rate).
Reasons for Late Payments
The reason might not always be inability. There may be other reasons for a missed payment. Some of them are:
Lack of Responsibility – Some may be careless when it comes to keeping track of their due dates. Some are not serious about maintaining their credit scores, overlooking its necessity. If you are such an individual you could get into a regretful situation sooner or later. So, it is better to get to understand the importance of timely payments and enjoy the benefits.
Limited Knowledge of Credit Scores – Not knowing the importance of on-time payments in credit scores can also be a reason for late payments. There are a few credit users who are still not aware of how much a late payment can affect them. If you are one, know that even a single missed payment could considerably affect your chances of getting loans. You can seek help from credit experts for more knowledge.
Inefficiency – A few people really try paying back their loans, but they may fail because of other financial crises. In this case, you should analyze your needs, and get credit only if it is necessary. Find out the source with which you can pay back, reconsider how dependable the source is, and then get new credit.
Busy Schedule – Though you are responsible, you might cross the due date as a result of your busy schedule. If you are this busy bee, you can mark the dates as a high-priority reminder in your busy schedule, and see to it that you don’t miss any dates. Or you can better assist a trustworthy individual or a service to help you handle all the credit needs. Scheduling automatic payments may also help.
Two Major Impacts of Late Payments
You might still have a late payment record, regardless of all the effective prevention measures discussed. In this case, you must first understand how it is going to affect your report.
- First, prepare yourself to accept the fact that it is going to stay on your credit report for up to 7 years.
- In addition to that, you will likely witness a hard dip in your credit scores by 100 to 120 points.
How To Handle a Late Payment Record
The way of handling a missed payment would differ from the scenario.
Less Than 30 Days
If you realized the missed payment within 30 days of the due date, you still have a chance. You can gather a ready payment, and pay it along with the penalty sum declared by your credit issuer. The best thing about this is, this payment will not be marked as late in your credit reports. Because credit bureaus actually take 30 days to mark it late.
More than 30 days
If it is past 30 days, it will stay on your credit report for the next 7 years for sure. But, don’t get disheartened and postponed paying back the payment. Because, if the payment keeps on exceeding it will relatively have worse impacts on the credit report. Say like, if it exceeds 60 days, you could find it even harder to resolve.
Another common scenario of a missed payment record could be a mere bug. The major credit bureaus might miss the records of your payment, or others’ mistakes would have been mistaken for yours. There are also possibilities of identity theft as well. If you are sure that you didn’t miss any payment dues, you can claim to check if there are any bugs in your reports. Read this blog for quick tips on credit repair.
The most worthy, yet cheap, credit repair services, like TheCreditPros, could help you rise disputes, and get them resolved for you.
Frequently Asked Question
1. How Can I Improve My Credit?
The only way to improve your credit is to make your upcoming payments on time. By this, you can develop good credit over a period of time, and reduce negative impacts, if you had any.
2. How Long Do Late Payments Stay on Your Credit Reports?
The late payments remain in your credit reports for a period of 7 years. But, its rigorousness starts dissolving eventually.
3. Can I get late payments removed from my credit report?
It is not possible for you to remove it from the credit report unless it is an error. If not, you will have to wait 7 years for the debt to completely fall off of the report.
4. Is there any minimum payment that can help me?
Though you are open to paying the minimum amount that you can afford, it may not be counted. Your credit issuer may consider your responsibility, but may not make any note of it officially.
This article should have enabled you to be more focused on timely payments. In short, credit scores consider a timely payment history as a key criterion to decide on loan approvals. So, it is better for you to ensure making payments on time regardless of the situation you are in. Because nobody can either afford a negative credit in their reports for 7 years or let their credit scores drop by 120 points. In addition to the discussed points, if you have any quick tips for handling a late payment record, drop them in the comments section.
If you wish assistance from credit experts, you can reach out to us over a call – (800) 411-3050