Late payments can happen to anyone. Luckily, there are several ways to potentially remove negative items from your credit reports.
Ways to remove accurate late payments
If your late payment item is accurate, consider sending a goodwill adjustment letter requesting for late payment to be removed from the credit report.
Ask the lender to remove it with a goodwill adjustment letter
This is a straightforward way to get a late payment removed from your credit report. In some cases, creditors are willing to make a goodwill adjustment if your payment history has been good or if you have a good relationship with them.
The process is easy: simply write a letter to your creditor explaining why you paid late. Ask them to forgive the late payment and assure them it won’t happen again. If they do agree to forgive the late payment, your creditor will adjust your credit report accordingly.
Creditors don’t always forgive late payments, but it doesn’t hurt to try. If your creditors receive and agree to the terms of your goodwill letter, make sure you receive the agreement in writing to keep your creditors accountable.
Ways to remove inaccurate late payments
It’s not uncommon to find inaccurate information on your credit report. If you do find a mistakenly reported late payment, you’re entitled by the Fair Credit Reporting Act (FCRA) to request the credit bureaus to substantiate it, and if found to be an error, remove it. There are a few different ways to do this.
If you find any errors on your credit report, you can file a dispute with the credit bureau that generated the report. You can also dispute the mistake with the creditor.
You can start this process by sending a dispute letter to each credit bureau that reported the mistake. The dispute letter should clearly state the negative information you’re disputing, include any documentation of the inaccurate information and request that the item be corrected or removed.
After receiving your dispute letter, the creditor or credit bureau has 30 to 45 days after receiving your dispute to investigate the claim. You should be notified of the results after the creditor or credit bureau has finished their investigation.
If the creditor or credit bureau has proof that the information they are reporting is correct, it will stay on your credit report. However, if they agree that the information is incorrect, they must remove it from your credit report.
When are late payments reported?
Creditors usually report late payments to the credit bureaus once you’ve been 30 days late or more on an account. Typically, the later you are on your payment, the more it will negatively impact your credit score.
How late payments affect your credit score
While the exact point drop will vary from person to person, late payments can significantly hurt a borrower’s credit. Those with higher credit are more likely to be affected worse than those with lower credit, and missing multiple payments in one month will typically have an even greater impact on someone’s credit.
How long late payments stay on your credit report
Late payments can stay on your credit report for up to seven years and can negatively impact your credit score as long as they remain on your credit report. That’s seven years of struggling to get new credit or facing higher interest rates. However, remember that there are things that you can do to potentially get late payments removed from your credit report.
Will paying off my debt remove a late payment from my credit report?
Paying off your debt is an option to consider if your lender or collection agencies won’t negotiate with you otherwise. However, simply paying off the debt won’t remove it from your credit report. It can legally remain on your credit report for up to seven years.
That being said, it’s better to have a debt reported as “paid” instead of as a “charge-off.” Having a charge-off mark in your credit history is a signal that you are a high risk to lenders and can make it difficult to apply for new credit accounts in the future.
Get help addressing late payments
To make this process easier, you can work with a credit repair organization that will help you address inaccuracies on your credit reports. The credit repair consultants have the knowledge and, most importantly, the time available to help you through the credit repair process from beginning to end.
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