I Never Imagined Paying Rent One Day Late Could Be So Disastrous

Pay Dirt is Slate’s money advice column. Have a question? Send it to Lillian, Athena, and Elizabeth here. (It’s anonymous!)

Dear Pay Dirt,

I live in a rental apartment managed by a fairly large local property management company in my small city of Portland, Oregon. I’ve recently gotten a new job and due to the changes in my pay dates and payroll schedule (and with no cushion fund in the bank), I have reluctantly had to pay my rent one day late for the past three consecutive months. I am finally back on track (paid this month on time, and will be able to continue to do so going forward).

I just tried to accept a credit card offer that I was supposedly pre-approved for, only to be denied. The reason given was due to my credit score. I then checked my credit score online and found that it has dropped from a good 672 to a poor 624, with the only negative notation on the screen being three late payments. I am current on all my other accounts, with absolutely no other late payments for many years, so the drop has to be because of my late rent. I had no idea that the property management company could or would be reporting payments to credit bureaus. Is this typical? Do I have any grounds to ask them to stop reporting? For some context, in my city, landlords are required by law to give a four-day grace period for late rent payments (meaning they can’t charge late fees until the fifth day rent is late).

—Didn’t Want to Pay Late

Dear Didn’t Want to Pay Late,

I’m generally a fan of the various services that report rent to credit bureaus because it is an excellent way for people to build a credit history without borrowing money. It’s becoming more common for property management companies to offer services like Credit Builder as a perk to their tenants, though this is generally an opt-in service. Unfortunately, these services can hurt more than they can help if you pay late. But most of these services only report to one credit bureau. Request a free copy of your credit report from all three bureaus from annualcreditreport.com, so you can get a clearer picture of where you need the late payments removed.

Because you were in the allowed grace period, it’s worth reaching out to your property management company and asking them to remove the late payments from your credit report. If you don’t have luck with them initially, you could write a goodwill letter explaining the situation and outlining the grace period and your temporary payday hiccup. You can also ask to unenroll in a credit reporting service when you talk to them. However, they still have the right to report overdue rent payments and accounts in collections, but flagging one day late is extreme. In the long term, the best thing you can do for your credit score is to pay your bills on time, every time—the more positive history you have on your credit report, the less three late payments will matter.

—Lillian

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