There are a lot of reasons why you might have missed paying one of your bills on time. Whether you’re struggling financially, you simply forgot to pay, or you didn’t know you owed money in the first place, the consequences will be the same: a late payment will appear on your credit report and hurt your credit score.
We’ll explain how long late payments will stay in your credit history, what consequences they can have for your credit and finances, and how you can minimize the damage they cause.
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When do late payments naturally fall off your credit report?
Under the Fair Credit Reporting Act, late payments must be removed from your credit report after 7 years have passed since the date they became delinquent. 1
In other words, a late payment will be automatically removed 7 years after you missed your first payment on that credit card or loan.
What counts as a late payment?
A late payment is a type of derogatory mark that can appear on your credit report. Any bill on a credit account that your creditor reported to one of the credit bureaus as at least 30 days overdue will appear as a late payment.
Late payments don’t appear on your credit report until they exceed this 30-day deadline (and some creditors won’t report them until they’re a full 60 days overdue). 2
This means that if you have a payment that’s just slightly overdue, i.e., between 1 and 29 days late, paying it will enable you to avoid incurring a derogatory mark on your credit report and damaging your credit score.
With that said, creditors have their own standards and protocols for late payments. For example, you could face late fees, increased interest rates, or other penalties after your payment is a certain number of days overdue. This could be just one day or longer, depending on the terms of your credit agreement.
How do late payments affect your credit score?
Late payments hurt your credit score. They can be very damaging because they impact your payment history, which is the most important factor involved in the calculation of your credit score.
A single late payment could cost you anywhere from just a few points to up to 180 points. Exactly how damaging it will be depends on several factors, such as how delinquent the account is and how good your credit history was to begin with.
You can expect a late payment to cause a more severe drop in your credit score if you previously had a good or excellent credit score than it would if you had a bad or fair credit score. The impact will also be more severe if your payment was very long overdue.
The good news is that regardless of how late your payment is, it will be removed at the same time (7 years after the original delinquency date). The impact on your credit score will also decrease over time.
Effects of Late Payments at Different Stages
How can you reduce the impact of late payments on your credit score?
Follow these tips to stop late payments from dragging down your credit score:
- Bring all your accounts current: Your first step should be paying off any overdue debts you currently have to prevent them from becoming more delinquent. If you can’t afford to do that, ask your creditors whether they offer hardship programs. You can also try out credit counseling.
- Counter derogatory marks with positive information: Simply paying all your bills on time going forward will add positive information to your credit file and eventually help you rebuild your credit. To establish a positive payment history more quickly, you can also try credit hacks like becoming a credit card authorized user or using bill-reporting services like Experian Boost.
- Explore methods for deleting late payments: Removing a late payment from your credit report will reverse all of its negative effects. If the negative mark is an error, you can dispute the mark to have it erased from your credit report. Alternatively, you can try sending your creditor a goodwill letter or negotiating pay for delete.
- Be patient: The truth is that rebuilding your credit will take time. As long as you understand what affects your credit score and you take care when managing your credit accounts, your credit score will eventually recover.
How long will it take your credit score to fully recover from late payments?
Most negative marks stop affecting your credit score after around 2 years, so rest assured that it won’t be long before your credit recovers from the negative effects of a late payment.
How can you avoid getting late payments on your credit report?
The best way to keep late payments off your credit report is to avoid paying your bills late in the first place. The following payment strategies can help you save money and spare you stress down the line:
- Set up autopay: Many creditors offer an automatic payment option so that you can have either your minimum payment or full balance (or a custom amount) automatically transferred to your creditor at the end of each billing cycle.
- Choose a convenient payment due date: Some creditors allow customers to choose their own payment due dates, so it’s worth asking your credit card company or loan provider if this is an option. Picking a date close to your payday can make it easier to budget and ensure that your bills are covered each month.
- Set up payment reminders: If you have trouble remembering to pay your bills but you don’t want to sign up for autopay, then consider setting up payment reminders on your phone or sign up for text alerts so that you receive a notification before each bill is due.
- Make payments throughout the month: Making multiple payments on each debt throughout the month rather than one large payment on your due date can help ensure that you at least pay your monthly minimum.
Once you’ve taken steps to address your delinquencies and prevent future late payments, you can also explore other resources for fixing your credit to improve your financial health.
