How to Remove Late Payments from Your Credit Report
January 30, 2020
Late payments can happen to anyone. Luckily, there are several ways to remove negative items from your credit reports.
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.
Negotiate With a Pay for Delete Letter
If you don’t have a great history with the lender, or if your debt has already been sent to a collection agency, you can consider sending a pay for delete letter.
This letter is a negotiation tool you can use to offer a full payment of the debt in exchange for a removal of the negative mark. You can also offer to sign up for automatic payments to ensure payments are not late in the future.
The letter should explicitly include what you’re offering (full payment, autopay), what you want in return (ceased reporting on the late payment, debt marked as paid) and the date you’d like a response.
Ways to Remove Inaccurate Late Payments
It’s not uncommon to find inaccurate information on your credit report. If you find 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.
File a Credit Dispute
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 is corrected or removed.
After receiving your dispute letter, the creditor or credit bureau has 30-45 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. The later you are on your payment, the more it will negatively impact your credit score.
How Late Payments Affect Your Credit Score
One late payment can lower a 780 credit score by 90 – 110 points, and a 680 credit score by 60 – 80 points according to Equifax. Missing multiple payments in one month has a greater impact on your credit score.
How Long Late Payments Stay on Your Credit Report
Late payments typically stay on your credit report for up to seven years and can negatively impact your credit score as long as they remain in your credit history. That’s seven years of struggling to get new credit or facing higher interest rates. However, there are things that you can do to remove negative late payments 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 collections agencies won’t negotiate with you. However, simply paying off the debt won’t remove it from your credit report. It can remain on your credit report for seven years.
That being said, it’s better to have a debt reported as “paid” instead of 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.
Hire a Professional to Remove Late Payments
To make this process easier, you can work with credit repair organizations that will help you to challenge inaccuracies on your credit report. Credit repair professionals have the expertise, knowledge and, most importantly, the time available to help you through the dispute process from beginning to end.