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How Long Do Missed Payments Negatively Impact Your Credit Score?

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Late payments can hurt your credit score. But how long will it affect your credit? Here’s a roadmap of what to expect after you miss a payment, what kind of consequences will follow regarding your credit score and what you can do to minimize the fallout.

How long does a late payment stay on your credit report?

Late payments remain on your credit report for about seven years. If you had a single late payment in January 2012, for example, that late payment should disappear from your credit report by January 2019.

If you miss three monthly payments in a row, your account will be reported 90 days late, yet the seven-year period of this missed payment appearing on your report would start with the first missed payment in that series. All three late payments would be deleted seven years from that original delinquency date, which is the first missed payment.

If there is a late payment that you never actually pay, the account will eventually be written off as a loss, and the debt could be transferred to a collection agency. After seven years from the original delinquency date, the account will disappear from your credit report.

How can you fix your credit score?

A missed payment becomes less significant over time. Remember, credit reports are designed to show how financially reliable you are. So, if you are careful not to miss more payments and demonstrate that you are using your credit wisely, your credit score will improve, even as you’re waiting for the initial delinquency to disappear.

“After a short time it will become clear that the late payment was an anomaly in an otherwise pristine credit history, and your positive payment history since that time will offset any negative impact it had on your creditworthiness,” according to Experian.

Generally, the impact of a late payment on your credit score depends on several factors, such as how severe the missed payment was, how recently it occurred and how frequently you’re making late payments. The longer a bill goes unpaid — for example, if it is 90 days late rather than 30 days late — the bigger impact it could have on your credit score.

Many people are surprised to learn that the higher your credit score, the more a single late payment will hurt you. Equifax notes, “A 30-day delinquency could cause as much as a 90- to 110-point drop on a FICO score of 780 for a consumer who has never missed a payment on any credit account.”

This is why it’s so important to dispute any inaccurate information that you find on your credit report. Be sure that you are checking your credit reports regularly, and if you find incorrect data, contact both the credit reporting agency that provided the report and the company that provided the listed information.

Tell the credit reporting agency in writing that you believe information on your credit report is incorrect. The credit bureau is required to investigate your inquiry, usually within 30 days. The credit agency also will forward any information that you provide about the inaccuracy to the company that provided the information. The information provider then must investigate the issue and report the outcome back to the credit reporting agency, as well as the other two major credit bureaus.

The credit bureau will notify you with written results about your dispute once the investigation is complete. If a change has been made on behalf of your inquiry, you will also receive a free credit report, which does not count as your annual free report. You’ll be asked to verify whether the report is now accurate and complete.

It’s also helpful to communicate directly with the provider of the inaccurate information that you’ve brought to the credit bureau’s attention. That way, the information, if proven to be inaccurate, cannot be reported again.

How to avoid late payments

There are several steps you can take to help ensure that you don’t miss payments on your bills or other credit accounts. For starters, you can set up automatic payments by contacting your payees directly. Most companies will happily withdraw funds from your checking account around the same time each month when your payment is due.

If you’d rather make payments on your own, make sure that you send them ahead of the due date so that they are not considered late, even if there is a grace period. Paying a bill as soon as you receive it could be a good habit to help you avoid any late payments.

Budgeting apps and calculators can also help you live within your means and set aside enough money each month to pay all of your bills. Some budget apps include Mint, Penny, Goodbudget and Clarity Money for Apple devices and Money Manager Expense & Budget, Mobills: Budget Planner and AndroMoney for Android devices.

You might also want to consider using a simple spreadsheet to track bills that are due and whether you’ve paid them.

Unfortunately, all it takes is one late payment to put a serious dent in your credit score. The good news is, there are ways to minimize the damage and reduce the chances of missing payments in the future. Seven years is a long time to wait, so it’s worth taking time now to make sure you pay on time.


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