Late Payment Removal
Lots of people worry that an overlooked bill means an overdue payment will be reported to a credit bureau and ruin their credit score.
But simple forgetfulness is unlikely to tank your score — even when you’re a little late.
Late fees versus overdue payments
Just because your wallet got hit with a late fee doesn’t mean your credit report got hit with a negative mark.
While a creditor may charge you a fee for paying three weeks late, your credit score will not be affected.
You can incur a late fee for being even 30 minutes late with a payment. Many creditors automatically impose a fee when your due date passes without a payment posted to your account. But if you’ve never or rarely been late before, your chances of getting a credit card issuer to reverse a late fee are rather good.
You don’t have to worry about a creditor reporting a payment that was a few days late, however. Credit bureaus don’t consider a payment late until it is 30 days past due. So, while your mortgage holder or credit card issuer may charge you extra for paying three weeks after the due date, your credit score should be unaffected by it.
When does a late payment get reported?
The standard for reporting delinquent payments to credit bureaus comes from the Credit Reporting Resource Guide, a standardized way for creditors to comply with federal law. Your payment can’t be reported late until it’s at least 30 days past due. You may be getting letters and phone calls about that overdue payment, but as far as the credit bureaus and your credit score is concerned, the account is “current and in good standing.”
Thirty days late is bad, but it’s not as bad as 60, which is not as bad as 90 and so on.
Knowingly and intentionally reporting you late when the bill is not at least 30 days past its due date violates federal law.
That said, late is not an all-or-nothing issue. Thirty days late is bad, but it’s not as bad as 60, which is not as bad as 90. The sooner you can catch up, the less damage to your credit and the sooner your score can start to recover.