How Long until a late payment becomes irrevlant

xlnc99

I just got off the phone to experian and they said its 6 months before they ignore late payments.

I appreciate other lenders have different agendas and criteria

On average when does 1 or even 2 late payments become insignificant? 1 year? 2 year?

This is of course providing you have made payments on time since the last late payment on that account.

Thanks

Willing2Learn

I think the relevance of a late payment marker is determined by the lending criteria and policies of whoever you make an credit application with.

Every lender will have different criteria.

I don't agree with what Experian have said, as they are not the lender!

xlnc99

Yes i took what experian said with a pinch of salt. They actually said it was 6 months for them in terms of effecting your credit score (which i no is meaningless)

However, i appreciate every lender is different but there must be an average somewhere. Is 2 years sufficient enough for most lenders, or even 1 year

Willing2Learn

It literally will depend on the lender and the specific product. For some products, at their best (lowest) APR, a creditor would expect a flawless six year credit history. Whereas for other products, the lenders target market might be for applicants who have a six year credit history containing negative markers.

xlnc99

Which leads me to my next question. Is 6 years that only years at that matter.....

For example, if i had a late payment for an old account open 7 years ago in the first year but a flawless 6 years after - what will the lender see.

I was told only 6 years of data. Will the include the late payment from 7 year ago or only focus on the flalwess 6 years

[Deleted User]

It depends on the lender and their commercially sensitive lending criteria as to what they look for an take into account.

boo_star

xlnc99 wrote: »

Which leads me to my next question. Is 6 years that only years at that matter.....

For example, if i had a late payment for an old account open 7 years ago in the first year but a flawless 6 years after - what will the lender see.

I was told only 6 years of data. Will the include the late payment from 7 year ago or only focus on the flalwess 6 years

If the lender keeps account history for more than 6 years then they could use data that's > 6 years old in their decision.

xlnc99

im referring to the CRA and what lenders look on based on the information with the CRA

boo_star

xlnc99 wrote: »

im referring to the CRA and what lenders look on based on the information with the CRA

CRAs only keep information for 6 years so obviously anyone relying solely on this can only go back 6 years max.

xlnc99

that is with closed accounts. With open accounts they keep them longer then 6 years i believe? Or is that not true?

I.e if i have an account that is 8 years old, does it only show the data for the previous 6 years and not the first two years?

boo_star

xlnc99 wrote: »

that is with closed accounts. With open accounts they keep them longer then 6 years i believe? Or is that not true?

I.e if i have an account that is 8 years old, does it only show the data for the previous 6 years and not the first two years?

They only report the last 6 years.