How long do late payments stay on credit report?

Posted on Jul. 05 2022 By: Oneblinc 5 min. read

If you are used to taking loans or are planning to do it in the future, you better know how long do late payments stay on credit report. When talking about finances, missing payment dates is not a good thing because it can impact your credit score and increase the debt through the fees. 

That is why it is important to have control over financial matters and track monthly expenses. As long as you know all the bills you must pay and write them down somewhere where you can remember, you won’t miss any date. Let’s understand how long do late payments stay on credit report as a way to avoid them. 

How do late payments impact credit score?

If you wonder “what is considered a late payment?”, the answer can be different for each lender. Every contract also has distinct terms about payment dates and fees after you miss the right day to return the installment or the full amount of money. This is one of the reasons why people can get confused. 

Imagine someone who has two loans to pay. If they don’t know the terms that have been signed, it is easier to think that both have the same details about payment. However, it varies by institution, type of loan, and the total amount. 

Another reason why people can miss the date is routine. Most people work, have to take care of their families, and have many bills to pay. Some of them forget to pay more than one expense, while others don’t have enough money for all the monthly bills, especially when unexpected debts come. 

All delayed payments, including the first one, can impact credit score in a way to make the next loans difficult. After 30 days late, credit bureaus are notified and put it on your credit report. This type of institution collects information used by lenders as criteria for accepting loans. The three major agencies in the U.S. are TransUnion, Experian, and Equifax. 

What happens after delayed payments?

If each delayed payment counts on the credit report, can you guess how long do late payments stay on credit report? The answer is seven years. Once it is already notified, there is nothing you can do to change it, so you must pay attention to not get another point in your credit history for the same loan. 

Late payments on credit report can be an issue if you want to get another loan. Usually, a small delinquency has less impact than a longer one with 90 days of delay. The number also counts as criteria for lenders, because one can be forgotten, but much more is seen as a bad sign of irresponsibility. 

A paper with different credit scores rates.

Even if you pay all the past-due balances and maintain a good financial life after the late payment, your credit history will stay the same for all these years. So if you want to know if it is true that after seven years your credit is clear, the answer is yes, but your FICO score will decrease before that.

Payment history is an important factor that determines 35% of the FICO score. This credit score analyzes the late payments using 3 criteria: frequency of late payments, the last delayed payment, and how late it was. The delay can be listed as 30, 60, 90, 120, and 150 days late. The longer it is, the more negative it will be. 

Why is it important to keep a good credit report?

If you have delayed payments on your credit report, it will be harder to pass through another loan analysis. Lenders will observe if you pay the installments after the late date because that shows your responsibility and ability to return the money you want to get. 

As the years go by, the negative impact will decrease if you have paid all your monthly expenses. Your credit score can change positively as a sign of good financial behavior. 

With a good financial history, it is possible to take mortgage loans for larger purchases. This type of loan is the main alternative for many citizens who want to buy a house or other properties. If that is your case, make sure you won’t miss any payment dates. 

How to avoid late payments

Now, you already know how long do late payments stay on credit report and must understand how you can avoid it. If you don’t have enough money for the full payment, try to get in touch with the lender to justify and negotiate. This action is a sign of concern and can give you more time. 

Usually, a few institutions allow smaller amounts of money as a sign of payment. The agreement must be written to avoid misunderstandings and specify the next payment date of the late installment. 

If your only problem is not the money, but remembering the date, you can set up automatic payments on your bank account. It is an alternative used as a reminder and a way to not spend the amount on other expenses.

Get to know more about credit report and financial terms at OneBlinc!

We hope this article helped you to understand how long do late payments stay on credit report. At OneBlinc, you find all the information you need to organize your financial life and put an end to your doubts. Enjoy your visit and read more content on our blog!

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