Your credit report paints a picture of your financial history and responsibility level that helps lenders make educated decisions about lending you money. Your current creditors report your debt and payments to the credit bureaus. The information your creditors report then appears on your credit report and determines your credit scores. If you pay a debt late, your creditor will report it as such and the resulting negative report will lower your credit rating. Fortunately, a financial slip-up that results in a creditor reporting a 30-day late payment to the credit bureaus won't haunt your credit history forever.
A 30-day late payment notation is a negative item for your credit. Like most negative items, the 30-day late payment will only remain on your credit report for seven years. After seven years, the Fair Credit Reporting Act dictates that the credit bureaus must delete it from your record. Only negative information disappears from your credit report after seven years. Thus, if the remainder of your account is in good standing, the positive payment history associated with the account will remain a part of your credit history for 10 years.
The impact that a single 30-day late payment has on your credit scores will vary depending on whether you carry high, moderate or low credit scores. In general, the better your credit scores are, the more a negative report will hurt you. According to MSN Money, if you carry a credit rating of 680, you can expect to lose approximately 60 to 80 points after receiving a 30-day late notation on your credit record. If you have a credit score of 780, however, the impact is much greater. You would lose anywhere from 90 to 110 points from a single late payment report.
A 30-day late payment will remain on your credit record for seven years, but the negative impact it has on your credit rating will decrease over time. The most recent information on your credit report has the greatest impact on your scores. Although the negative information continues to affect your scores as long as it remains on your report, it becomes less significant to the scoring formula as it ages. Provided you do not make the same mistake again, you are gradually replacing old, negative information with new, positive information. Because of this, your late payment will hurt your credit rating less as time goes by.
No creditor can report 100 percent accurate information on every customer's credit report all of the time. Mistakes are bound to happen. If your creditor reported that you submitted a payment late when you actually paid on time, you can dispute the inaccuracy both with the creditor that reported the error on your credit report and with the credit bureaus themselves. Both the creditor and the credit bureaus are required by law to conduct an investigation and either remove or correct any inaccuracies they find.
- Equifax: How It Works
- Federal Trade Commission: The Fair Credit Reporting Act (Section 605/p.22)
- Equifax: FAQ – How Long Does Information Stay on My Credit Report?
- MSN Money: Five Ways to Kill Your Credit Scores
- Experian: Credit Scores Don't Just Look At Last Two Years of Credit History
- Federal Trade Commission: How to Dispute Credit Report Errors
Ciele Edwards holds a Bachelor of Arts in English and has been a consumer advocate and credit specialist for more than 10 years. She currently works in the real-estate industry as a consumer credit and debt specialist. Edwards has experience working with collections, liens, judgments, bankruptcies, loans and credit law.