How Do Professionals Remove Late Payments From Credit Reports?

Having late payments on your credit report can significantly impact your credit score. Late payments are one of the biggest factors in calculating your credit score, accounting for 35% of your FICO score. Just a single late payment can cause your credit score to drop.

Fortunately there are ways to remove late payments from your credit report if they were reported in error or if you can get the creditor to agree to delete it. Here’s what you need to know about how professionals remove late payments from credit reports

Verify If The Late Payment Is Accurate Or A Mistake

The first step is to verify if the late payment on your credit report is accurate or if it was reported in error. There are two potential scenarios:

• You did actually pay late. In this case, the late payment report is valid and it will be very difficult to get removed.

• The credit bureau or lender made a mistake when they said you paid late. You never paid late. This error can be fixed pretty easily if this is the case.

To confirm if the late payment is a mistake, pull your credit reports from AnnualCreditReport.com and review all accounts carefully. Specifically look for any late payments and determine if you recall paying on time or not.

If you find a late payment reported in error you’ll need to dispute it with the credit bureau to get it removed.

Dispute Incorrect Late Payments

If the late payment on your credit report is wrong, you should dispute it right away, according to experts. Here are the steps:

• File a dispute with the credit bureau (Equifax, Experian, TransUnion) that reported the error. State in writing that your credit report contains inaccurate information and include evidence that proves you paid on time.

• Also contact the lender or credit card company that furnished the inaccurate late payment data to the credit bureaus. Ask them to investigate and update the incorrect status.

• Follow up continually until the inaccurate late payment is removed. This usually takes 30 to 45 days, but with fast rescoring it can be done faster.

• Get any confirmation of removal in writing from the credit bureau and lender.

The Fair Credit Reporting Act says that credit bureaus have to look into any mistakes on credit reports and fix them. By law, they have to take down false information if it is properly disputed with proof.

Request Goodwill Removal from Creditors

If the late payment on your report is accurate and you actually did pay late, removing it becomes more challenging. In these cases, professionals recommend sending a goodwill removal letter to ask the original creditor (the lender or credit card company) to delete the late payment out of goodwill.

Here are some tips for effective goodwill letters:

• Highlight extenuating circumstances that led to the late payment, such as medical problems, job loss, family emergencies, etc.

• Emphasize you are a loyal customer who consistently pays on time. The late payment was a one-time exception.

• Keep the letter professional and polite. Do not make demands.

• Follow up with phone calls to the lender’s management team. Be patient and persistent.

• If they agree, get confirmation in writing before the late payment is deleted.

Keep in mind, creditors are not obligated to remove accurate late payments, but many will if the customer has a good history with them. It depends on their individual policies.

Wait For Late Payments To Fall Off Reports

If it’s not possible to remove the late payment, then professionals recommend waiting it out. Accurate late payments will automatically fall off your credit report after 7 years. However, the impact on your scores diminishes over time.

To offset the late payment while waiting:

• Don’t miss any other payments. Stay current on all accounts.

• Keep credit card balances low. High utilization hurts scores.

• Build positive credit if possible by adding a new installment loan and making on-time payments.

Within 12 months, the late payment will have less of an impact as you rebuild positive credit history. Within 24 months, the late payment will have minimal impact on your scores.

Use Credit Repair Strategies Carefully

Some credit repair companies claim they can remove accurate late payments and other negative items from credit reports in exchange for a fee. However, professionals advise being very cautious about using these services for a few reasons:

• It’s illegal to remove accurate negative information. At best, these services often just dispute everything hoping something falls off.

• You can dispute errors yourself for free instead of paying a credit repair agency.

• Be wary of scams. Many companies make big promises but don’t deliver and just take your money.

• Unscrupulous companies may use unethical tactics or “file frivolous disputes” that could get you in legal trouble down the road.

The safest bet is sticking with the legitimate removal methods above and letting the late payment naturally fall off your report after 7 years if you are unable to get it removed.

How To Avoid Late Payments

Of course, the best way professionals deal with late payments is to avoid them completely. Here are some tips to prevent late payments from happening:

• Set payment reminders and calendar alerts for every bill’s due date.

• Enroll in automatic payments or pay bills immediately after receiving them.

• Review account balances regularly. Don’t spend over your limit.

• Contact creditors immediately if you anticipate payment issues. Ask for due date extensions or alternate plans before missing the due date.

• Build an emergency fund equal to 3-6 months of expenses as a buffer for financial hardship events.

By proactively monitoring accounts and payments, professionals are able to avoid the majority of late payments that lead to credit score damage.

Key Takeaways

• Accurate late payments can only be removed from credit reports if the original creditor agrees to delete them. Incorrect late payments can be disputed with proof they are reporting errors.

• Goodwill removal letters may convince creditors to delete late payments out of courtesy, especially if it was a one-time event with extenuating circumstances.

• If unable to remove, accurate late payments will automatically fall off reports after 7 years. The impact diminishes over 1-2 years.

• Avoid credit repair agency scams. Legitimate ways to remove late payments are disputing errors, asking creditors for goodwill removal, waiting them out, and building positive credit.

• Staying current on all accounts, keeping low balances, adding new positive credit, and avoiding new late payments will offset the damage of existing late payments.

By verifying if late payments are accurate or not, following up continually with detailed disputes and goodwill requests, allowing time for the impact to decrease, and proactively avoiding new late payments, professionals are able to manage late payments effectively to maintain high credit scores.