Late Payments on Credit Reports- Are Late Payments On Your Credit Report Illegal?

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Last Updated on 10 months by Komolafe Bamidele

The effects of paying late or Late Payments on Credit Reports may be devastating. Lenders, employers, and landlords all evaluate your credit report to gauge your reliability as a borrower, employee, or tenant. 

Your payment history, including any overdue payments, is summarized for easy reference. 

This article will discuss the implications of late payments on your credit report and address the question, 

Are late payments on your credit report illegal?” and acceptable reasons for late payments on the credit report?

How Long Does a Late Payment Stay and Affect Your Credit Report?

Late Payments on Credit Reports

Late payments have a lasting impact on your credit reports, remaining visible for a considerable period.

 Specifically, they stay on your credit report for seven years from the original date of the delinquency.

 Even if you eventually repay the overdue bills, the late payment will persist on your credit report until the seven-year mark, regardless of whether the delay was 30 days or 60 days.

The significance of a late payment on your credit score cannot be understated since payment history is the most critical factor in determining your creditworthiness.

 A single late payment can have a substantial impact on your credit score

However, the effect gradually diminishes over time, especially if it was an isolated incident and you make a concerted effort to submit subsequent payments on time.

 It’s worth noting that late payment has a 30-day window before it is reported to the credit bureaus, 

but any delay beyond that period will likely result in a decline in your credit score, potentially by as much as 180 points.

To provide further clarity, here’s an overview of the implications based on the timing of your late payment:

Payments less than 30 days late:

If you miss your due date but submit the payment within the 30-day window, you are fortunate.

 Creditors do not report a late payment until it surpasses the 30-day mark. However, it’s important to note that you may still incur a late fee.

Payments 30 or more days late:

Once payment becomes overdue by 30 days, it will be reflected on your credit report. 

It is crucial to promptly repay the missed payment to mitigate the negative impact on your credit.

Payments more than 60 days late:

Failing to repay the late payment and subsequently missing your next due date will result in a 60-day late notice appearing on your credit report. 

This can further harm your credit score. If you continue to miss payments, additional notices will appear on your credit report,

 your debt may be assigned to a collection agency, and your creditor is likely to close your account.

Late payments are recorded on your credit report under the specific account associated with the unpaid balance. 

Therefore, if you are behind on a credit card payment, the late payment information will be indicated in the corresponding section of your credit report, indicating the duration of the delay.

Are Late Payments Illegal? 

Late payments are illegal when it comes to your credit report. 

Late payments are illegal based on specific consumer law, 15 USC 1681a (2) (a) (i), which is part of the United States Code.

The law in question suggests that transactions and experiences between the consumer and the entity responsible for reporting the payment should be excluded from consumer reports.

To address this issue, it is recommended to obtain a comprehensive credit report from all three major credit bureaus.

 Carefully review how the late payment is being reported across these bureaus and identify any discrepancies or inaccuracies. 

Drafting a dispute letter that highlights these violations and references the relevant consumer law can be an effective approach. 

The video below will help you to learn more about how to address these late payments, acceptable reasons for late payments on credit reports and restore your financial well-being.

Tips to Fix and Remove Late Payments On Your Credit Report 

Obtain a Copy of Your Credit Report

To begin the process, request a copy of your credit report from all three major credit bureaus: Experian, Equifax, and TransUnion

Carefully review each report to identify any errors or inaccuracies related to late payments.

Dispute Inaccurate Information

If you find any inaccuracies or errors in your credit report, it’s crucial to dispute them promptly.

 You can do this by writing a letter to the credit bureaus detailing the specific information you believe to be incorrect.

Tips to Fix and Remove Late Payments On Your Credit Report

 Include your full name, address, the credit bureau’s name, and contact information, the collection agency name, and the reasons for disputing the late payment.

 Request that the credit bureaus investigate the matter and remove any incorrect information.

Dispute Limitations

When disputing late payments, it’s essential to be mindful of certain limitations.

 It’s suggested not to dispute more than five items within 30 days to avoid being labelled as frivolous. 

Dispute all relevant late payments with each credit bureau individually, as the removal does not automatically apply across all reports.

Dispute by Letter

While online disputing options may be available, it’s generally recommended to send a dispute letter by mail. 

This method provides a paper trail and enables you to maintain control of the process. 

Numerous dispute letter templates are available online, but ensure your letter contains essential details such as your personal information,

 the credit bureau’s details, the collection agency’s information, and a clear explanation of the dispute.

Settlement Negotiation

If the late payments are valid and accurate, you may consider negotiating a settlement with the collection agencies.

 Debt collectors often purchase debts at a fraction of their original value, allowing room for negotiation. 

Offer a settlement amount that is less than the full debt owed, typically around 30% to 60% of the total. 

However, ensure that the collection agency agrees to remove the late payment from your credit report as part of the settlement.

Request Deletion Letter

When settling with a collection agency, always request a written deletion letter before making any payment. 

The deletion letter should confirm that the collection agency will remove the late payment from your credit report upon receipt of the agreed-upon settlement amount. 

Having this letter in hand provides evidence and safeguards your credit improvement efforts.

Avoid Restarting the Statute of Limitations

If you choose to enter into a payment plan with the collection agency, be cautious not to reset the statute of limitations on the debt. 

Making even a small payment or acknowledging the debt can restart the clock on how long the debt stays on your credit report. 

Ensure you have the means to fulfil the payment plan entirely to prevent further complications.


In conclusion, late payments on your credit report are illegal as discussed in this article. 

They can have a significant impact on your credit score and remain on your credit report for up to seven years. 

However, you can take steps to address and rectify late payments by reviewing your credit report for inaccuracies, disputing any errors, and negotiating settlements with collection agencies.

 It’s important to be proactive in managing your credit to restore your financial well-being.

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