How Do Late Payments Impact My Credit Reports?

The Rob Ellerman Team at ReeceNichols
The Rob Ellerman Team at ReeceNichols
Published on September 21, 2020

Since the middle of March, more than 57 million Americans have applied for unemployment benefits. Even with those benefits, millions are falling behind on their debt payments.

Greg Iacurci at, citing a “new study,” claims that the late-July expiration of the additional $600 a week unemployment subsidy “… puts 6 million people at risk of not being able to pay their bills this month.”

For most of them, their credit reports aren’t top-of-mind right now. But if you are among the group, it’s important to at least consider how your unemployment is impacting your credit score.

First, evaluate where you stand

The credit bureaus often make errors in their reporting, so it’s a good idea to check your reports from “the big 3” to ensure there are no errors (such as late payments not dropping off after the time limit and others).

Americans are entitled to one free credit report from Experian, Trans Union and Equifax, every 12 months.

“However, in response to the Covid-19 pandemic, all three nationwide credit bureaus … are offering free weekly online credit reports via (the only source authorized by Federal law) through April 2021,” according to Beverly Anderson, president of Global Consumer Solutions at Equifax.

This is such an amazing offer that there is simply no reason to not be keeping an eye on your credit score.

About those late payments

Seven years from the date of the missed payment is the length of time a late payment will remain on your credit report. This applies even if you pay the bill in full, Anderson claims.

If the reason for the late payments involves a Covid-19-related job loss, you may want to consider adding a consumer statement to your credit reports.

Anderson suggests that you keep the statement to 100 words or less and “… clarify why you were late making your payment.”

She includes a sample of what to say in a statement:

“Be advised that the negative accounts on my credit report are related to a temporary reduction in income due to the Covid-19 pandemic. I intend to make these up as soon as I can.”

Of course, the statement won’t hide any negative information, but lenders can view it and learn of the mitigating circumstances. All three bureaus accept these statements in their dispute departments.

To add a statement to your Equifax credit report, visit

The folks at Trans Union offer options as well. On their site, “… you can easily choose from pre-worded options like, ‘I am unable to make timely payments due to the impact on my job/wages as a result of the COVID-19 pandemic,’ or you can write your own.” The “Disputes” section of their website is where to get started. Visit

Experian also directs those who wish to file a personal statement to their dispute area, which you will find at

When things get better for you

Sometime down the line your situation will change. It’s important not to forget those statements you sent to the credit bureaus.

Remember, the negative entries have a life of seven years. Once that time limit occurs, the information will drop from your reports and you should then remove your statement as well.


“Once the negative information is removed, the statement may unnecessarily notify lenders that you had a payment issue in the past,” warns Jennifer White, consumer education specialist with Experian.

In the meantime, prioritize your bill payments

The top priorities, after paying your living expenses include those related to your ability to get to work. If you need your car to get to work, car payments and auto insurance come right after basic living expenses.

Next, because failure to pay may lead to a driver’s license suspension or arrest, take care of child support and alimony payments. If you are on good terms with your former spouse, the pros at Equifax suggest speaking with him or her about your situation. Try to come to an agreement on when you can make up the missed payments.

Or, contact the Division of Child Support services. “In some cases, you might be able to change your monthly payments to something more affordable,” according to Experian.

If anything is left after paying these bills, pay the following three before anything else:

  • Student loans
  • Personal loans
  • Tax debt

Chin up! There is a light at the end of this tunnel.

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