What To Do If You Have Late Payments Or Delinquency

You’ve made it to the end of the credit series! You’ve learned about credit reports and credit scores, how to read your credit report and how to address any errors. The last topic we’ll cover is how to address any credit mishaps you’ve had.

Review Dates

When addressing adverse credit, there are two important dates to keep in mind. The first is the Date of First Default (DFD). The DFD determines how long a negative item will remain on your credit report and the clock starts ticking six months after you’ve stopped paying a debt. Negative items will remain on your report for seven years after this date, regardless of whether you pay them off in the future.

As you review your report, make sure there are no debts listed that are older than 7.5 years. If you see any older debts, you will want to contact the credit bureaus to make sure they are removed.

The second date is the Date of Last Activity (DLA). The DLA determines the statute of limitations on a lawsuit (depending on the state, between three and ten years). This clock starts on the date of last activity, for example, the last payment. Unlike the DFD, however, this clock can be restarted any time there is new activity performed on the debt. Activity includes making a payment or payment arrangement, and even verbally acknowledging the debt.

The DFD impacts your score, but the DLA can impact far more than just your credit score if a lender decides to sue for unpaid debt. Therefore, it is important to be careful when contacting a creditor or collections agency to make sure you do not inadvertently restart the DLA clock.

    Pink alarm clock
    Talk to Your Lender
    One of the most important steps you can take is to prevent an account from becoming delinquent in the first place. If you have a medical emergency or lose your job, reach out to your lender before it affects your ability to pay.

    There is a common misconception that lenders will not negotiate until and unless you’ve missed a payment, but it’s actually the opposite. Most creditors would rather work with you to receive some payment than have you not pay anything at all. If you politely and clearly explain the situation, there is a good chance your lender will lower or stop your minimum payments while you get back on your feet.

    Avoid Collections

    The next step is to avoid delinquent accounts from going to collections. Even if you already have a late payment or multiple late payments, contact the creditor and ask if they can put you on a payment plan. Sometimes they will ask you to make the first payment right there on the phone. If you have the money available, make the payment. Otherwise, it’s far too easy to put it off or forget.


    Per the Fair Credit Reporting act, a creditor is required to send you written validation of a debt within five days of initiating a collection. If the creditor cannot or will not validate the debt, you can open a dispute with the credit bureaus, the Fair Trade Commission or the CFPB and try to have the debt removed.


    If you already have collections on your account, the main objective transitions from improving your score to avoiding being sued by the creditor. Even if you pay off a debt in collections, it will not improve your FICO score (though it may improve your Vantage score). The only thing you can do to improve your score is request that the collection remove the account from your report.

    The chances of this happening depend on the creditor or collection agency, but you are more likely to succeed if you offer to pay at least part of the amount owed. If you go this route, make sure you get confirmation in writing from the creditor before you make the payment.

    Unless you can pay the debt in full, thereby satisfying your obligation, make sure you do not inadvertently reset the DLA. When discussing accounts with a creditor or collections agency, state that you are seeking information, rather than acknowledging the debt. Instead of communicating by phone, you are better off mailing a request via certified mail so you can track it. You can use this sample pay for delete letter from NerdWallet as a template.

    Thank you!

    Thank you for following along with our credit series. You can review the older posts at the bottom of this page or head to the blog main page for additional information.


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    Britton Gregory · August 6, 2018 at 7:09 am

    To put some color on this: I’ve seen Bad Things happen to a credit report due to delinquency a couple of times, and both times the collections agency put things right in short order (once payment was made).

      Sphynx Financial · August 6, 2018 at 10:29 am

      Thanks for your insight, Britton!

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