How Long Does a Delinquent Payment Stay on a Credit Report?
Understand how delinquent payments affect your credit, their duration on reports, and steps to manage your financial record effectively.
Delinquent payments significantly influence an individual’s credit standing. These missed payments appear on credit reports, which lenders and creditors consult when evaluating creditworthiness. Understanding their recording and duration on a credit report is important for managing financial health.
Understanding Delinquent Payments
A delinquent payment occurs when an individual fails to make a scheduled payment by its due date. This applies to various financial obligations, including credit card bills, mortgage installments, auto loans, and even some utility or medical bills. Creditors typically report a payment as delinquent to the major credit bureaus—Equifax, Experian, and TransUnion—once it becomes significantly overdue. This reporting usually happens after 30, 60, or 90 days past the original due date.
Duration on Credit Reports
Most negative information, including delinquent payments, remains on a credit report for up to seven years. This period begins from the date of the original delinquency. For example, a 30-day late payment, a charge-off, or an account sent to collections remains on the credit report for seven years from that initial delinquency date. Even if an account is paid in full after being reported as delinquent or charged off, the record of the past delinquency stays on the report for the full seven-year duration.
The Fair Credit Reporting Act (FCRA), a federal law, governs how long certain information appears on credit reports. While most negative items adhere to the seven-year rule, bankruptcies are an exception, remaining on reports for seven to ten years. After the mandated period, credit bureaus are required to automatically remove these entries.
Effect on Credit Scores
Delinquent payments can substantially lower credit scores, impacting an individual’s ability to obtain future credit. The impact depends on how late the payment was. A 90-day late payment, for instance, causes more damage than a 30-day late payment. More recent missed payments have a greater negative effect than older ones.
The number of delinquencies and the overall length of the credit history influence score reduction. Multiple late payments across different accounts harm a score more significantly than a single isolated incident. A long and positive credit history might mitigate some damage from a solitary late payment, but any delinquency negatively affects creditworthiness.
Accessing Your Credit Report
Individuals have the right to access their credit reports to monitor their financial information. Federal law provides one free copy of a credit report every 12 months from each of the three nationwide credit reporting companies: Equifax, Experian, and TransUnion. AnnualCreditReport.com is the official source for obtaining these reports without charge.
When accessing a credit report, carefully review all listed accounts and their payment histories. Look for entries marked as “late,” “delinquent,” “charge-off,” or “collection.” The report shows the date of last activity, the date the delinquency was reported, and the account status.
Correcting Errors on Your Credit Report
If inaccurate information related to a delinquent payment appears on a credit report, individuals have the right to dispute it. Contact the specific credit bureau reporting the error. Disputes can be submitted online, by mail, or over the phone, and provide relevant documentation, such as proof of payment or account statements, to support the claim.
Once a dispute is filed, the credit bureau is required to investigate the accuracy of the disputed information within 30 to 45 days. They will contact the creditor that furnished the information to verify its accuracy. If the information is inaccurate, incomplete, or cannot be verified by the creditor, the credit bureau must remove it.