Have you had a credit report for more than a few years? Chances are, you’ve been hit with a late payment or two. So we will cover how to remove late payments from your credit report to help you get your score back on track.
They are very common because there are so many ways for them to happen. Maybe you were forgetful with 1 of the 12 bills you pay every month.
Or, you might be short on cash for a month or two. Sometimes, bypassed due dates can simply happen by mistake.
Late payments can be very frustrating. This is the case especially when it’s the result of some temporary bad luck or a silly oversight.
These pesky line items can affect your credit score for a long time. Thankfully, the negative impact on your score does diminish over time.
However, a late payment stays & will continue to be a blemish on your credit report for seven years after the original reported delinquency date.
Fortunately, just as there are several ways to add a delinquency, there are also several ways to remove them. In this guide, I will discuss a number of methods that may help you remove a late payment form your credit report.
What if there’s been a mistake?
If you think you have a delinquency that’s been misreported due to identity theft or because something was just misreported, you should attempt to negotiate with the creditor first. They will usually correct any errors quickly. Then notify the 3 credit bureaus once you contact them and present your evidence.
The first thing you should do is call the creditor. This is especially if it’s just a simple clerical error.
That’s typically something they’ll recognize right away. They might even be able to fix the error on the spot without needing any documentation.
If the problem is something more sinister, like identity theft, this may become a more tedious process. Your creditor may require copies of your identification, police reports, sworn affidavits, or other documents related to the case. The Federal Trade Commission has a helpful Identity Theft Recovery Plan on their website.
If the creditor is not legitimate, out of business, or not able to cooperate for some reason, you can always go directly to the credit bureaus. In this case, it’s best to send each bureau a dispute letter. Include any supporting documents you think they’ll need.
If you aren’t sure what to send, you can call the bureau first and ask. When you send the dispute letter, be sure to send it via certified mail.
It may be a quick and easy process or it might take a bit longer. However, once the issue is resolved, you could see an improvement in your credit score in a matter of weeks.
How can I dispute a legitimate late payment?
The Fair Credit Reporting Act (FCRA) gives you the right to dispute items on your credit report. In that way, you can protect yourself from unseemly creditors and overwhelmed credit bureaus.
When you’re faced with a legitimate late payment, the key is to look for anything reported incorrectly within the entry on your credit report. Examples:
- Misspelled word(s)
- Incorrect date(s)
- Incorrect dollar amount(s)
- Any other errors
If you hit a wall here, try to find something that might be wrong. For instance: you can potentially dispute the late payment if the creditor is no longer in business or another company has acquired them.
Try to find something questionable to dispute. The idea here is to find a creditor that may have a hard time validating the late payment when the credit bureaus request supporting documentation for your dispute.
HOW TO SEND A CREDIT DISPUTE LETTER
Once you’ve found your error(s) or suspected error(s), you need to send credit dispute letters. Send these to each of the credit bureaus reporting the erroneous information.
You can send these either by mail or online. In your letter, you should identify the error in question, and ask for them to remove the entire entry from your credit report.
Once the credit bureau receives your claim, they will label the item you flagged for review as “in dispute” on your credit report. Over the next 30 days, the bureau must investigate your claim. They will notify you of their findings.
If your dispute is successful, they might actually remove the entry from your credit report. Depending on the creditor and the severity of the error, this may not have a high chance of succeeding.
However, I’m one who always advocates for giving it a try. The worst that could happen is that the delinquency stays on your report the full seven years. So, why not try?
If the bureau finds that your dispute is unwarranted because the reported information is verified and determined to be accurate, they will simply remove the “in dispute” label. No further action will be taken.
If they are able to confirm the problem you identify, or if they fail to verify or validate the information that’s being reported, they are required to remove the disputed item from your record.
It’s certainly possible to dispute something online or even over the phone. However, it’s always a good idea to use certified mail and retain receipts in order to document what you sent and when you sent it. This will help you hold the bureau to the 30-day timeline required by law.
What is a “Goodwill” adjustment?
A goodwill adjustment is when a creditor agrees to remove a late payment from your credit report as a show of “goodwill.” Note: Creditors may reward a request supported by one or more mitigating factors that contributed to the late payment, but are under no obligation to do so.
Goodwill adjustments can be tricky. This is because creditors must report everything accurately.
Some may argue that removing a late payment that was actually late could be false reporting. However, that’s not necessarily the case.
If the creditor decides to “believe you” when you tell them you sent the check-in plenty of time but must have gotten lost in the mail, they certainly have the right to determine that it wasn’t really a “late” payment as much as it was a “mishandled” payment.
Some excuses for having a late payment are going to be more convincing than others. However, it’s always worth a try.
There isn’t a true downside other than a small investment of time and/or resources. The upside, however, is significant. A successful removal can add several points to your credit score.
HOW TO REQUEST A GOODWILL ADJUSTMENT
The best way to ask for a goodwill adjustment is to send a goodwill letter to the creditor. The most important thing to remember when writing a goodwill letter is that YOU are ultimately responsible for the late payment.
Take a conciliatory tone, and explain the circumstances with an emotional plea. Let them know you’ve learned from the situation, and that it won’t happen again.
A goodwill letter is more likely to work if you are asking them to remove a “first offense” late payment after a long history of on-time payments. If this is the latest in a long-established trend of late payments, it’s going to be much tougher to remove the negative entry from your report.
How can I negotiate to have a late payment removed?
Some creditors might be more open to “reassessing” the circumstances surrounding your dispute or plea for a goodwill adjustment if you offer them some kind of incentive to take such action. The incentives can be wide-ranging, and would depend on your specific situation.
If you have a late payment in one of the first few months with a new creditor, you might be able to make a compelling case by offering to set up automatic payments. As a new client with a late payment right out of the gate, your creditor might jump at the opportunity to set up automatic draws to “lock in” future payments.
If you suddenly came into some money through a large bonus or an inheritance, and you have a late payment on a long-standing account with a large monthly balance, you might consider offering to pay down a large portion or even the full amount of the outstanding debt in exchange for their agreement to remove the late payment.
Not all creditors will agree to these kinds of negotiations, but if you think strategically about what might interest the creditor in “making a deal,” this could be an option worth pursuing.
Examples of creditors removing late payments?
Some creditors may be more receptive than others to goodwill letters, adjustments, or negotiations to remove negative entries. It can be immensely helpful to research your creditor & find out if others have had success removing their late payments with that company.
For instance, here’s a report from an individual who was able to remove their Capital One late payments via light negotiation.
Here’s another report from someone who disputed their Best Buy late payments with all three credit bureaus, and successfully had their marks removed.
Tip: pull up your favorite search engine and search “remove ‘Creditor’s Name’ late payments from credit report”. Keep an eye out for cases specific to the company you’re dealing with.
Can I get some help with this?
Some of the methods I covered are quick and easy, but some of them require a fair amount of time and effort. If it starts to feel like your situation calls for more than what you are personally capable of handling, you may want to consider procuring the services of a quality credit repair company.
A good credit repair company can help you with any of these options, because they have experts that handle these issues each and every day. I’ve used credit repair companies to remove late payments from my report, and I’ve found them to be extremely helpful and well worth the cost.
There are several ways to attempt to remove late payments from your credit report, and it’s ultimately up to you to develop your plan and make it happen. Working to improve your credit always a worthwhile endeavor, regardless of how it all shakes out.