Late payments on credit card debt can have a significant impact on one’s credit score, making it harder to access credit in the future. If a payment is more than 30 days overdue, the lender can report the delinquency to credit reporting agencies, which will bring down the credit score. This negative information can stay on a credit report for up to seven-and-a-half years from the date of first delinquency, which can impede attempts to move past the delinquency.
## The Impact of Late Payments
If a cardholder is late with a payment for more than 30 days, the lender can report the matter to credit reporting agencies, which will bring down the credit score. This is because the payment history accounts for 35% of the credit score. The older a missed payment is, the less of an impact it will have on the credit score. If the payment is more than 60 days overdue, the issuer could also raise the card’s interest rate.
Moreover, if cardholders become more than six months past due, the lenders can charge off the account or turn it over to debt collectors, further complicating things.
## Date of First Delinquency
Any negative information relating to a late payment or charge-off can stay on a credit report for about seven years from the date of the first missed payment — even if the amount due has been paid off. This reporting period begins from the date of the first missed payment, which is the “date of first delinquency.” The Fair Credit Reporting Act (FCRA) says that a credit reporting agency cannot cite an account as delinquent that was charged off or sent to collections more than seven-and-a-half years ago.
This time limit on reporting of delinquent debt enables consumers to move on from their past mistakes. The lenders who report accounts they have sent to collections to credit reporting agencies are obligated to provide a date of first delinquency for these accounts. This also applies to debt collectors, who are also required to report the date of first delinquency that lenders gave them. If you face such a situation, it is advisable to try to establish this date with them or any other reliable source.
## Disputing Inaccurate Information
The law allows consumers to dispute erroneous information on their credit reports. This provision enables you to fight any incorrect input about an account that appears on your credit report for a longer period than it should, based on the date of first delinquency. Consumers can file a dispute with the credit reporting agency that issued the incorrect information and investigate the matter within 30 days. The lenders who reported the information can also investigate and make any necessary corrections to the credit reporting agencies.
## Editorial Perspective
Late payments and credit card debt delinquencies have long-lasting consequences on a person’s credit score, making it harder to access credit in the future. Hence, it is crucial to pay credit card debt on time and in full to avoid these issues. Establishing a timeline of the date of first delinquency helps people stay on track of their credit scores. Inaccurate information can be disputed, but prevention is always better than cure. Cardholders should regularly monitor their credit reports to ensure that their payment information is accurately reflected, and any issues are addressed promptly.
## Conclusion
Late payments on credit cards can impact one’s credit score, making it difficult to access credit in the future. Establishing the timeline of the date of first delinquency is critical to managing credit scores accurately. Disputing any incorrect or erroneous information is necessary immediately. It is advisable to pay credit card debt on time and in full to avoid any issues with negative information on a credit report. Cardholders should regularly monitor their credit reports to ensure the accuracy of their payment information.
<< photo by Clay Banks >>
