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In the complicated world of credit scores there is one fact pretty much everyone assumes is true: Late payments are bad for your credit scores. After all, negative information like late payments can stay on your credit reports for up to seven years, so the first sign of a late payment on your credit reports signals years of impending credit doom, right? Actually, that isn’t always the case.

How Are Late Payments Affecting Your Score?

It’s essential that you find out exactly how late payments are affecting your credit. Here are a few ways you can do that:

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  1. Get your free credit score from Our Credit Report Card will show you the factors having the greatest impact on your score, including delinquencies, and what you can do about them.
  2. Sign up for an ExtraCredit account. For less than $25 a month, you can access 28 of your FICO scores from all three major credit bureaus. You won’t find these scores all together anywhere else. An ExtraCredit account also offers $1 million in identity theft insurance, dark web and account monitoring, exclusive discounts for credit repair services, and opportunities to earn cash when you are approved for qualified offers.
  3. Get your free annual credit reports from each of the three major credit reporting agencies—Equifax, Experian and TransUnion—so you can see whether your reports contain late payments. From now until April 2021, you can get your credit report from each bureau for free every week.

Financial institutions, insurance companies and utility companies use credit scores as a way to predict how risky a customer you will be. If your credit score is low, it indicates that you are more likely to make late payments or file costly insurance claims. In turn, this means the creditor is more likely to lose their investment by lending you money.

How Long Do Late Payments Stay on a Credit Report?

Most negative items, including late payments, can stay on your credit reports for seven years, but not all negative information is equally damaging. Here’s the first late payment secret you need to know: A payment that is 30 or 60 days late isn’t going to have as serious an effect on your credit score as a payment that’s 90 days past due.

Because scoring systems are focused on predicting whether or not you’ll go at least 90 days late, a 30- or 60-day late payment that occurred long ago is actually not that damaging to your credit scores, as long as it is an isolated incident. It’s when your accounts are recently reported 30 or 60 days past due on your credit reports that your credit scores plummet temporarily.

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How Much Does a Late Payment Hurt My Credit Score?

If 30- or 60-day late payments are an infrequent occurrence, they shouldn’t cause lasting damage to your credit score unless they are recent (last two years or so) or occur on a regular basis. In this case, the fact that you are habitually late with your payments can cause long-term damage to your credit scores.

It’s a whole new ballgame once you have a 90-day late payment, however. If you have been more than 90 days late (even just once), the credit scoring models consider you much more likely to do it again. One 90-day late payment will damage your credit for up to seven years. From a scoring perspective, a single 90-day late payment is as damaging to your credit scores as a bankruptcy filing, a tax lien, a collection, a judgment or repossession. Being 90 days late causes you to be viewed as a possible “repeat offender” and a higher risk to creditors. Here’s a summary of how late payments impact your credit scores:

  • 30 days late: This record will damage your credit scores most when it is recent. The exception is if you are 30 days late often. Otherwise, a single 30-day late payment should not cause lasting damage.
  • 60 days late: Similarly, recent 60-day late payments cause the most damage. Again, the exception is if you are 60 days late often which will certainly hurt your scores. Otherwise, one late payment should not cause long term damage.
  • 90 days late: This record will damage your credit scores significantly for up to seven years. It doesn’t make a difference whether or not your account is currently 90 days late. Remember, the goal of the scoring model is to predict whether or not you will pay 90 days late or later on any credit obligation. If you have already done so you’re considered more likely to do it again compared to someone who has never been 90 days late. As such, your credit scores will drop.
  • 120+ days late: Late payment reporting beyond the initial 90-day missed payment does not cause additional credit score damage directly. However, there is an indirect impact to your scores. At this point, your debt is usually “charged off” or sold to a third-party collection agency. Both of these occurrences are reported on your credit files and will lower your credit scores further.

If you continue to miss your payments beyond 90 or 120 days, the following records may also harm your credit score:

  • Collections: Collections are the result of late payments. There are two types of collections: Those that have been sold to a third-party collection agency or those that have been turned over to an internal collection department. Regardless of which one shows up on your credit reports, your scores will suffer.
  • Charge-offs: If you fail to make payments on a credit account for 120 days or longer, the creditor may mark the account as “charged off,” meaning they have written off your debt as a loss. A charge-off is a negative notation on your credit report (it can remain there for seven years), because it shows you did not repay the account as agreed, even if you later pay off the debt. And just because the creditor doesn’t expect to get that money back doesn’t mean the debt disappears. The creditor or the third-party collector it sold the debt to can continue to try to collect the debt as long as the state’s statute of limitations allows it to.
  • Repossessions or Foreclosures: Having a home foreclosed upon or a car repossessed are both considered serious delinquencies and will lower your credit scores considerably for up to seven years. The assumption normally made by the consumer is “Hey, I gave the home or car back to the lender, why are they going to show me as delinquent?” The answer you’ll get from lenders is that you signed a contract with them to buy a home or car and pay it in full over a period of time. You failed to do so; therefore they consider you to be in default of your agreement with them and will report this on your credit reports.

Now that our late payment secrets have been revealed, let’s look at what it means to you: You should avoid making late payments whenever possible. But we now know that one 30- or 60-day late payment isn’t the end of the world. Since 90-day late payments are the real credit score busters, you should avoid a 90-day late payment at all costs.

Can You Remove Collection Accounts From Your Credit Report?

If you already have a 90-day late payment record on your credit history, your scores are already suffering. Be certain that the information is accurate on your credit reports. If it isn’t, you have the right to dispute it not only with the credit reporting agencies but also with the lenders who reported it. Your goal is to have the error corrected or removed, and once it is, your credit scores should recover.

You may have heard that you can negotiate a “pay for removal” deal with a debt collector or creditor, but these companies will likely tell you the contracts they have with the credit agencies prohibit them from doing so — otherwise, people’s credit reports wouldn’t accurately reflect their payment histories.

It’s also important to know paying off a collection account does not remove it from your credit report or improve your credit scores much. (In some newer credit score models, paid collection accounts do not have a negative effect on credit scores, but at the moment, those scoring models are the exception, not the rule.)

If your credit reports are accurate, there are still things you can do to to improve your credit scores, despite the late payments dragging them down. First of all, you’ll want to make on-time payments going forward and wait for the negative information to age off your credit reports. Beyond that, you can focus on paying off debts, using as little of your available credit on your credit cards as possible and only applying for new credit when it’s necessary. The information you get when you check your credit scores on should help you identify which areas need your attention most as you work to improve your credit.

This article has been updated. It was originally published November 01, 2016.