How Badly Does a Bad Report From a Credit Card Company Affect Your Credit?

Getting behind on your credit card payments is easy to do, either by carrying a growing balance or even by simply forgetting the bill in the bottom of a drawer. However, late credit card payments can be reported to the three major credit bureaus and can impact your credit rating and your score. While the bureaus do not publicly disclose their formula for score calculation, there are several important factors that will help you minimize the damage to your credit score when your credit card payment is late or goes into default.

Late Payments

Credit card companies will report payments that are 30 days or more late. A payment that has gone 60 days late will be reported again and its status will be updated monthly on your credit report. Payments that are 60 days late decrease your credit score more than 30-day late payments. Even when you make the payment, the tardiness will still show on your credit report.

Older Payment History

A derogatory report for an overdue payment to your credit card company will have less impact on your credit score as more time passes. Recent events are considered more damaging so, for example, if you've only have one 30-day late payment; your score will automatically begin to increase again over time.

Errors on Report

Errors can sometimes occur on credit reports and you may find that your credit card company has reported a late payment when you have proof that it was not late. If this occurs, each of the three major credit bureaus has a contact address where you can explain the situation. They will investigate and, if they find that there is no support for the derogatory report, they will remove the item from your credit report and your credit score will immediately rise.

Seven Years

If the derogatory report from your credit card company is accurate, the only cure is time. Your credit score will begin to rise as the event gets older and it will completely drop off your report in seven years. All late payments, collections and judgments will disappear after seven years, while bankruptcies will stay on the report for longer at up to 10 years. If all of your other payments remain current, your credit score will slowly rise over the course of the seven years and will jump when the derogatory report falls off.