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If you've missed a payment on one of your bills, the late payment can get reported to the credit bureaus once you're at least 30 days past the due date. Penalties or fees could kick in even if you're one day late, but if you bring your account current before the 30-day mark, the late payment won't hurt your credit.
When Do Late Payments Show Up on Your Credit Report?
When creditors send information to the credit bureaus, they use different status codes to indicate whether the payment on your account is current or late. There's no code for an account being one to 29 days late. Creditors will use the "current" code during that period, which is why your late payment won't show up—or impact your credit scores—until it is at least 30 days late.
Creditors send updates to the credit bureaus at different times, and there's no way to know exactly when the late payment status will show up. Many creditors send updates monthly, however, so you could expect the late payment to appear on your credit report within a month or two of falling behind on your payments.
Do Late Payments Affect Your Credit Score?
Late payments can hurt your credit scores, although the impact will depend on your overall credit profile and how far behind you fall on your payments.
Generally, a single late payment will lead to a greater score drop if you had excellent credit and a clean credit history. If you already have poor credit and your credit report shows other late payments, a new late payment could still hurt your score, but it may lower your score by fewer points.
The further behind you fall on your payments, the greater the potential impact on your credit scores. For example, having an account that is 60, 90 or 120 days past due will likely be worse for your credit than a single 30-day late payment. In addition, the impact of late payments on your credit scores typically decreases over time. And after seven years, late payments will fall off your credit report and won't impact your scores at all.
Figuring out when a late payment will be removed from your credit report can sometimes be confusing, though. If you miss a payment and then bring your account current, the late payment will fall off after seven years, but the rest of your payment history on the account will stay on your credit report. If you miss another payment after bringing your account current, that late payment will have its own seven-year timeline for removal.
When late payments lead to an account being closed, perhaps when the creditor sends the account to collections or charges off the account, the entire account and all related negative marks get deleted seven years after the first late payment.
What to Do if You Missed a Payment
If you think you may miss a payment, try to reach your creditor as soon as possible before it becomes a late payment misunderstandings. Disputed late payments can sometimes be remedied or even postponed, depending on the lender.
Some creditors give borrowers a grace period, and you might find that missing a payment by a few days doesn't result in any additional fees or penalties. But others may charge you a late payment fee as soon as you miss the due date.
If you're already late but can bring your account current, do this right away and then ask for a waiver or refund of the late fee. The creditor isn't required to remove the fee, but they may be willing to do so if you usually pay your bills on time. If you typically pay your credit card bill in full each month and the late payment led to interest charges, you may be able to get those back as well.
When you've missed payments and aren't able to bring the account current, you should still contact your creditor and ask about hardship options. Some lenders and credit card companies may work with you to lower your interest rate or monthly payment, get you on a different payment plan, or let you temporarily stop making payments without being considered late.
What to Do if the Reported Late Payment Is Incorrect
When your credit report shows that you missed a payment, but you know you paid the bill on time, you can file a dispute with the credit bureau where the late payment appears and ask it to correct your credit report. Each of the major credit bureaus—Experian, TransUnion and Equifax—has different procedures, but you can file disputes with each by mail, phone or online.
With Experian, the simplest option is to use the online Dispute Center. After creating or logging in to your account, you can review your credit report and select the late payment that you want to dispute. You can then indicate the reason for the dispute and upload supporting documents, if you have them, such as proof of your on-time payment.
Experian will keep you updated during the investigation and resolution process, which generally takes 30 days or less. Once the investigation is complete, the disputed information will be corrected, deleted or, if deemed accurate, it will remain on your report.
Monitor Your Credit Reports for Late Payments
Often, you'll know when bills are past due and how much you owe. But sometimes there's a mistake, creditors don't have your current contact information, or you forget about an account and miss the correspondence. You may want to setup automatic credit payments to avoid late payments.
Monitoring your credit reports can help you stay on top of changes, such as reported late payments, and let you quickly react when you see something is amiss. To get started, you can sign up for free access to your Experian credit report, which comes with credit monitoring and alerts.