Key Takeaway
Late payments on your credit file don't have to follow you around forever. Under the Privacy Act 1988 and the Credit Reporting Code, credit providers must follow strict rules when reporting repayment history. If they got it wrong, you have the right to challenge the listing and have it removed — even before the standard two-year retention period expires.
You Did Everything Right — and It Still Went Wrong
You know that sinking feeling. You're sitting across from a broker, and they've just pulled up your credit file. There it is — a couple of late payments from a year ago, maybe eighteen months back, sitting on the screen like a permanent record of the worst few months of your life. The job you lost. The illness that wiped you out. The separation that turned your world upside down.
You've recovered since then. You're earning again, saving hard, paying everything on time. But those late payments don't care about your comeback story. They're just red marks on a file, and right now they're standing between you and the home loan you've been working towards.
If that sounds like you, take a breath. You're not alone, and this situation might not be as permanent as it feels right now.
What Are Late Payments on Your Credit File — and How Did They Get There?
Since Australia moved to comprehensive credit reporting, credit providers now report how you manage every monthly payment on your credit accounts. This is called repayment history information, or RHI. Every month, your lender tells the credit bureaus — Equifax, Experian, and Illion — whether your payment was on time, 14 days late, 30 days late, 60 days late, or further overdue.
Before comprehensive credit reporting, lenders could only see negative events like defaults and court judgements. Now they can see the full picture — every single monthly payment across your credit cards, personal loans, car finance, and home loan. It's like going from a pass/fail system to getting graded on every assignment.
Each late payment entry sits on your credit file for two years from the date it was reported. So if you missed a payment in March 2024, that entry stays visible until March 2026. And if you missed several payments across a few months, each one has its own two-year clock.
Why Late Payments on Your Credit File Matter More Than You Think
Here's the hard truth: late payments hit harder than most people realise. A single missed payment can knock 50 to 150 points off your credit score. String a few together, and you're looking at serious damage that affects your ability to borrow for years.
When you apply for a home loan, the lender doesn't just look at your score — they pull your full credit file and review your repayment history month by month. Most major banks want to see a clean repayment record for at least the last 12 months. Even one late payment in that window can be enough to get you knocked back, or pushed towards a specialist lender charging significantly higher interest rates.
And it's not just home loans. Car finance, credit cards, personal loans, even phone contracts — they all check your repayment history. Those late payments from a rough patch can follow you into every financial conversation you have for the next two years.
Expert Tip from Elisa
"Most people don't realise that the way late payments are recorded under comprehensive credit reporting is incredibly granular. Your credit file shows exactly which months you were late and by how many days. When I review a client's file, I'm looking at whether those dates are accurate, whether the provider followed correct reporting procedures, and whether there was a hardship arrangement in place that should have changed how payments were recorded."
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Myths About Late Payments That Keep People Stuck
Myth 1: "If I Pay Off the Debt, the Late Payment Disappears"
This is the most common misunderstanding we see. Paying off a debt or catching up on missed payments is absolutely the right thing to do — but it doesn't erase the record of the late payment from your credit file. Once a credit provider has reported a missed payment to the bureaus, that entry sits there for two years regardless of whether you've since caught up. Your file will show the late months and the on-time months that follow, but the damage is already recorded.
Myth 2: "Late Payments Are the Same as Defaults"
They're not. A late payment (RHI) and a default are two completely different types of listings. A late payment is recorded when you miss a scheduled payment by 14 days or more. A default is a more serious listing that requires a formal notice process and only applies when you owe at least $150 and your account is at least 60 days overdue. Defaults stay on your file for five years; late payments stay for two. Both are damaging, but they have different legal requirements — and different grounds for removal.
Myth 3: "There's Nothing You Can Do — You Just Have to Wait"
This is what the banks want you to believe. But the reality is that credit providers must comply with strict rules under the Privacy Act 1988 and the Credit Reporting Code when reporting your repayment history. If they recorded the wrong dates, failed to account for a hardship arrangement, reported your account incorrectly after a dispute, or didn't follow proper procedures, the listing may be invalid. You have a legal right to challenge it.
Myth 4: "Only the Bank Can Fix My Credit File"
While the credit provider is responsible for the accuracy of what they report, you are not limited to asking them nicely and hoping for the best. Under the Privacy Act 1988, you can lodge a formal correction request with the credit bureau, escalate to the Australian Financial Complaints Authority (AFCA), or engage a licensed credit repair professional to investigate and challenge the listing on your behalf.
When Can Late Payments Actually Be Removed?
Let's be clear — not every late payment can be removed. If you genuinely missed a payment and the provider reported it correctly, it stays for two years. That's the law, and no one can change it.
But here's what most people don't know: credit providers get it wrong more often than you'd think. Under the Privacy Act 1988 and the Credit Reporting Code, there are specific situations where a late payment listing can be challenged and removed.
Grounds for Late Payment Removal
- Incorrect reporting dates — the provider recorded the wrong month or wrong number of days overdue
- Hardship arrangement in place — you had a formal or informal hardship arrangement, and the provider should have reported your payments differently
- System or administrative errors — the provider's own systems failed to process your payment correctly
- Failure to comply with the Credit Reporting Code — the provider didn't meet their obligations around notification or correction
- Account dispute — you were disputing the account or charges at the time the late payment was recorded
- Identity issues — the late payment was recorded on the wrong person's file or relates to fraudulent activity
Our team at Australian Credit Solutions reviews every case against these grounds. We examine your credit file line by line, cross-reference the provider's reporting with their obligations under the law, and build a case where legitimate grounds exist. We're ASIC Licensed (ACL 532003), and we only take on cases where we've identified real grounds to challenge the listing.
If you're looking at your repayment history and wondering whether those late payments are reported correctly, it's worth getting a professional set of eyes on it.
How Sarah Got Her Late Payments Removed and Secured Her Home Loan
Note: This is a composite scenario based on real client experiences. Names and identifying details have been changed.
Sarah, 38, from Brisbane, was a project manager who had always been meticulous with her finances. Then she was made redundant during a company restructure. For about four months, while she was job hunting and living off savings, a couple of credit card payments slipped past due dates. She caught up as soon as she found new work.
Eighteen months later, Sarah was in a strong financial position. Good income, solid savings, ready to buy her first home. But her broker came back with bad news — three late payment entries on her credit file were preventing approval with any major lender.
When Sarah contacted Australian Credit Solutions for a free assessment, our team identified that during her period of financial difficulty, she had actually contacted her credit card provider and requested a temporary payment arrangement. The provider had agreed verbally but never formalised the hardship arrangement — and then reported the payments as late anyway.
Under the Credit Reporting Code, the provider had an obligation to account for the hardship arrangement when reporting her repayment history. Our team lodged a formal challenge, provided evidence of the hardship request, and within six weeks, the three late payment entries were removed from Sarah's credit file. Her score recovered, and she secured her home loan with a mainstream lender at a competitive rate.
Wondering If Your Late Payments Can Be Removed?
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What You Should Do Next
Step 1: Get a Copy of Your Full Credit File
Order your credit file from all three bureaus — Equifax, Experian, and Illion. You're entitled to a free copy every three months. Look specifically at the repayment history section and note every month that shows as anything other than "current" or "on time."
Step 2: Check the Details Carefully
Don't just glance at the late payments — check the dates, the amounts, and the number of days overdue. Do they match your records? Were you in a hardship arrangement at the time? Did you have a payment dispute with the provider? Any discrepancy is a potential ground for challenge.
Step 3: Understand Your Rights
Under the Privacy Act 1988, you have the right to request correction of any information on your credit file that is inaccurate, out of date, incomplete, irrelevant, or misleading. The credit bureau has 30 days to investigate your request. If they don't resolve it, you can escalate to AFCA or the Office of the Australian Information Commissioner (OAIC).
Step 4: Consider Professional Help
If you've got late payments sitting on your file that you believe are inaccurate, or if you were going through genuine financial hardship when the payments were missed, it's worth getting a professional review. Credit law is detailed and technical — a licensed credit repair specialist knows exactly what to look for and how to build a strong case for removal.
You can learn more about how late payment removal fits into your broader credit score improvement journey, or start with a free credit assessment to get a clear picture of where you stand.
Key Stat: We have a 98% success rate when we take on cases — because we only accept cases where we've identified legitimate grounds to challenge the listing.
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What Our Clients Say
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"Australian Credit Solutions helped me fix my credit file and made the whole process stress-free. The team were professional, supportive, and kept me updated every step of the way."
"From the first phone call, I knew I was in good hands. The team was knowledgeable, patient, and achieved exactly what they said they would. Five stars!"
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"The best decision I made was calling these guys. They removed a default that had been on my file for years. Professional service from start to finish."
Elisa Rothschild
(BA/LLB)Principal Solicitor & Director
With over 12 years of experience in credit law, Elisa has helped thousands of Australians remove unfair credit listings and rebuild their financial futures. She leads Australian Credit Solutions' legal team with a focus on consumer advocacy and regulatory compliance.
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