Know Your Rights

Late Payments - How They Effect My Credit

Paying your bills late can have a serious impact on your credit report because your creditors and the credit bureaus report those late payments .  The more recent your delinquency, the more it will have a negative impact on your score.  Over time, the effect of the delinquency begins to diminish.  

Negative information, including a late payment, will be on your credit report until 7 years after the date of delinquency.  There are some exceptions to this rule including bankruptcy and back taxes which may stay on your report for up to 10 years. 

The Fair Credit Reporting Act mandates that your credit history be reported with maximum possible accuracy.  However, it does not actually mandate that credit reporting be performed.  That is, a lender does not have a responsibility to report your payments, but if they do report to the bureaus, the information must be accurate. Thus, you can be making all of your payments for an account on time.  The creditor is not obligated to report it under the FCRA (that does not mean, however, that they may not have a contractual obligation with the bureaus to report it).  One example we have seen is that many public utility companies will not report your account at all until you become delinquent on it.  Then, they will report the delinquency.

The Fair Credit Reporting Act requires those that report to report with "maximum possible accuracy."  If any information, negative or not, on your credit report is incorrect, the consumer has a right to dispute it.  Check out our website for detailed instructions on the disputing process.

The Fair Credit Reporting Act (FCRA) gives consumers the right to dispute a credit report and demand a prompt and reasonable investigation into the inaccuracy.  The law provides that the consumer is to receive a response to the investigation within 30 days of the date that the credit bureau first received notice of the dispute.  If they fail to do so, and fail to take notice of your complaint into the inaccuracy of their reporting, you may be able to recover your losses.  If you have errors on your credit report, contact SmithMarco, P.C. SmithMarco, P.C., has over 30 years of combined experience practicing law protecting the rights of consumers around the country.

Of course, the best possible solution is to pay your bills on time.  But unfortunately, we do not live in an ideal world and payments might need to be late.  If you have a good payment history and know you are going to make a late payment, contact your creditor and let them know.  If you are a good customer, they might remove or waive the late fee.  Creditors can use their discretion when reporting an account 30 days late if the customer has a good payment record. 

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