How Long Does a Late Payment Stay on Credit Reports?

past due late payment

After accidentally overlooking a bill, a concerned Credit Sesame user writes in to find out how badly a late credit card payment will affect her otherwise excellent credit score.  John Ulzheimer, credit expert for Credit Sesame, answers.

“John, I have excellent credit and currently have a credit score of 804, according to your site. I’ve never missed a payment in my life. I had so much going on over the holidays that I completely missed my car payment and didn’t realize it until the bank called two weeks later. How badly will this one late payment hurt my credit score?”

With the hectic pace during the holiday season—between holiday shopping,  traveling plans, and wrapping up the new year, it’s easy to see how things can get lost in the shuffle and accidentally overlook paying a bill.  Your question is one of the most commonly asked questions when it comes to credit scores, but it’s also one of the most confusing considering the volume of misinformation perpetuated on the web. To clear up some of the confusion, let’s take a look and break it down.

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In your case, there are actually two issues at play. A late payment, and a late payment that, according to my math, appears to be of the 14-day variety. Here’s the good news for you: the late payment isn’t going to show up on your credit report cards so you won’t have to worry about any impact on your scores. Lenders are not allowed to report late payments, especially one day late credit card payment, to the credit reporting agencies until the payment is a full 30 days past the due date, and 14 days isn’t 30 days. Consider that a belated Christmas gift, one that you deserve given your history of sterling credit management.

But let’s say hypothetically that you actually went a full 30-days past the due date and the lender reported you as being 30-days late to the credit reporting agencies. That would be very problematic, but not if you relied on a lot of the misinformation circulating the web. There’s a myth floating around that a 30-day late payment has no impact on your credit scores, and there’s actually a little truth to that. But, that only applies to historic 30-day late payments, as in those that happened in the past. When a lender reports you as being 30 days late your credit reports shows that you are currently past due, and that’s a different animal entirely.

An account that is currently past due is considered a serious derogatory item that, incidentally, also has a past due balance of some amount. That would easily turn your 804 into something closer to a 640. That’s the bad news. The good news is that if you’ll cure the account, then the following month the lender will report the account as being paid on time, with no past due amount.

Your 30-day late payment will become a historical late payment rather than a current late payment and your score will recover, but not completely. You’ll get back into the 700s, but not by much. After the late payment turns a year old you’ll be above 760 and after two years you’ll be much closer to 800. So, the answer to your initial question is, “roughly 160 points.” And the answer to the logical follow up question, “how long until my score recovers”, is “around three years.”

More on Credit Scores from Credit Expert, John Ulzheimer:

5 Secrets to Earning Great Credit Scores

Ask the Expert: Can I Dispute My Credit Score?

What’s More Important Than Your Credit Score? The Factors Behind It

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Published January 12, 2015 Updated: April 18, 2016
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