Unlocking Home Equity: How HELOCs Work and What You Need to Know

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How Do Late Payments Impact Your Credit?

Late payments can significantly affect your credit score, with the impact varying based on your overall credit history. For instance, a single late payment can cause a substantial drop in the credit score of someone with an excellent history of on-time payments. Conversely, for someone already behind on multiple accounts, the additional late payment might not have as severe an impact.

How Long Do Late Payments Stay on Your Credit Report?

Late payments can remain on your credit report for up to seven years. If you bring the account current before closing it, the account itself can stay on your report for up to ten years, but the late payment will still be removed after seven years. If the account is never brought current, it may be closed by the creditor and sent to collections, with the late payments and potential collection account falling off your report seven years after the first late payment.

How to Remove Late Payments From Your Credit Report

Review Your Credit Reports

Start by reviewing your credit reports from Experian, TransUnion, and Equifax. Check for details about the late payments, including which account is reported late, when the late payments were reported, and the amount past due.

Verify the Accuracy of Late Payments

Compare the reported information with your financial records to identify any discrepancies. Remember, creditors typically report an account as late only if it is 30 days past due.

Contact Your Creditor to File a Dispute

If you find an error, you have the right to file a dispute under the Fair Credit Reporting Act (FCRA). Submit a dispute directly to the creditor with any supporting documentation. The creditor must investigate and, if an error is found, update the credit bureaus.

Dispute Inaccurate Information With Credit Bureaus

You can also dispute inaccuracies directly with the credit bureaus. Each bureau will contact the creditor to verify the information. Disputes are generally resolved within 30 days.

Can You Remove Accurate Late Payments?

Accurate late payments generally cannot be removed from your credit report. However, if you missed a payment due to extenuating circumstances, you might try contacting the creditor or sending a goodwill letter to request removal.

Late Payments Tied to Fraud

If a late payment is from a fraudulently opened account, you are not responsible. File a police report and an identity theft report with the Federal Trade Commission, then contact the creditor’s fraud department to have the account and late payments removed from your credit report.

How to Avoid Late Payments

Set Up Autopay

To avoid accidental late payments, set up autopay for your minimum monthly payments.

Create Account Alerts

Set up email, text, or app notifications for upcoming due dates.

Contact Creditors for Hardship Options

If you can’t afford your payments, contact your creditors to explore hardship options, such as skipping a payment or lowering the minimum payment amount.

The Bottom Line

Regularly checking your credit reports can help you stay on top of important changes, such as new accounts or late payments. Experian’s free credit monitoring can send you alerts about these changes and help you track your FICO® Score.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We are here to assist you with the best mortgage solutions tailored to your needs.

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