Payment history: how late payments are reported

Payment history is the biggest part of most credit scores. One late payment can sting, but it isn't the end of the story. Here's how lates actually get reported, and what changes over time.

Paying a few days after your due date usually means a late fee, not a mark on your credit report. Creditors generally report a payment as late once it's 30 days or more past the due date.

If you stay behind, it gets reported in steps: 30 days late, 60, 90, 120 and beyond. Each step usually does more damage than the one before.

A late payment can stay on your report for up to seven years. The good news: its effect on your score usually fades as it gets older, especially if everything since then has been paid on time. Recent lates generally hurt more than old ones.

• Due date: the day your payment is due each month.
• Days past due: how far behind a payment is, counted from the due date.
• Payment grid: the month-by-month history on each account, often shown as codes like OK, 30, 60 or 90.
• Current: an account that's caught up, with no past-due amount.
• Goodwill adjustment: when a creditor agrees, as a courtesy, to change how a late payment is reported. They don't have to.

Carlos's car payment is due on the 5th. In June, he pays on the 20th. That's 15 days late: he pays a late fee, but nothing goes on his report. In August, a family emergency hits and he doesn't pay until September 10th. That's more than 30 days past the August due date, so the lender reports a 30-day late for August. (Made-up example.)

• Lates reported for months you actually paid on time. Keep your bank records.
• The wrong level, like a 60-day late that should have been a 30.
• The same late showing differently on different reports.
• Accounts you're behind on right now. Catching up stops new late marks from being added.

If a late payment is accurate, it generally stays. You can ask a creditor for a goodwill adjustment, but they're allowed to say no.

Open your report and find the payment grid on each account. Circle every late mark and write down the month, the level (30, 60, 90) and the creditor. Then compare those months to your bank statements. Also, turn on autopay for at least the minimum payment on every open account, so a busy month doesn't become a new late.

Educational information only. Not legal, financial, investment or tax advice. Results vary, and no one can guarantee credit outcomes.