How Long Do Missed Payments Stay on Your Credit Report?

A missed payment on a credit report indicates that an individual failed to meet a financial obligation by its due date. This entry serves as a record for lenders, reflecting a borrower’s adherence to repayment terms. Credit reports compile information about a consumer’s credit activities, including payment history, which is a primary indicator of creditworthiness. The presence of missed payments can influence how future creditors assess the risk associated with extending new credit. Understanding how these entries are recorded and their duration is important for managing financial standing.

Standard Reporting Period for Missed Payments

A missed payment, such as one that is 30, 60, or 90 days past due, remains on a credit report for seven years. This timeframe begins from the date the account first became delinquent, which is the point it was reported as 30 or more days past due. Even if the overdue amount is paid later, the record of the late payment itself remains on the credit report for this full duration.

Creditors do not report a payment as late to the credit bureaus until it is at least 30 days past its due date. If a payment is made within this initial 30-day window, it avoids being recorded as a late payment on the credit report, although late fees may still apply from the creditor. The impact of a late payment tends to lessen as the entry ages, even while remaining on the report.

Varying Durations for Different Negative Entries

Beyond standard late payments, other severe negative credit entries carry specific reporting periods. A charged-off account, which occurs when a creditor deems a debt uncollectible after a prolonged period of non-payment, remains on a credit report for up to seven years. This seven-year period for a charge-off is measured from the date of the first missed payment that initiated the delinquency leading to the charge-off. Similarly, collection accounts, which arise when a debt is sold or assigned to a collection agency, also stay on a credit report for seven years. This timeframe for collections is calculated from the date of the initial delinquency with the original creditor.

Bankruptcies have distinct reporting durations depending on the type filed. A Chapter 7 bankruptcy, which involves liquidation of assets to pay debts, remains on a credit report for up to 10 years from the filing date. In contrast, a Chapter 13 bankruptcy, which involves a court-approved repayment plan, stays on a credit report for seven years from the filing date.

Historically, civil judgments and tax liens were reported on credit reports. However, major credit bureaus stopped including civil judgment records and tax liens on credit reports by April 2018. While these public records may still exist in other databases, they do not appear on consumer credit reports from the three nationwide credit bureaus. This change means that these specific types of entries no longer directly impact a credit score through credit report inclusion.

How Missed Payments Influence Your Credit Score

Payment history holds significant weight in credit scoring models, impacting a consumer’s credit score while a missed payment is active. For instance, payment history accounts for 35% of a FICO Score and 41% of a VantageScore 3.0, making it the most influential factor. A single late payment can cause a notable drop in a credit score, particularly for individuals with an otherwise strong credit history.

The severity of the lateness directly correlates with the negative impact on the score. A payment reported as 30 days late will have a less severe effect than one reported as 60 or 90 days late. Each subsequent 30-day increment of delinquency can lead to further score reductions. Additionally, the recency of a missed payment plays a significant role; more recent late payments have a greater negative influence on the score than older ones.

Credit scoring models are designed to predict the likelihood of future payment defaults. Therefore, a missed payment signals a higher risk to potential lenders, which is reflected in a lower credit score. The impact can vary based on an individual’s overall credit profile and the specific scoring model used. Consistent on-time payments following a missed payment can gradually help mitigate the negative effects over time.

Removal and Correction of Credit Report Entries

Negative entries on a credit report are automatically removed once their statutory reporting period concludes. For example, a late payment record will naturally “fall off” a credit report seven years from its original delinquency date. This automatic process ensures that adverse information does not indefinitely affect an individual’s credit standing. No action is required from the consumer for accurate negative entries to expire from the report.

Consumers have the right to dispute and correct inaccurate or erroneous information appearing on their credit reports. This process can be initiated online, by phone, or through mail with each of the three major credit bureaus: Experian, TransUnion, and Equifax. When filing a dispute, it is beneficial to provide supporting documentation that substantiates the claim of inaccuracy.

Upon receiving a dispute, the credit bureau is required to investigate the contested information within 30 days. If the investigation confirms the information is inaccurate, the credit bureau must correct or remove the entry from the report.