Late payments can happen to anyone. Luckily, there is more than one way to remove negative items from your credit reports.
Ask the Lender to Remove it With a Goodwill Letter
This is a simple way to get a late payment eliminated from your credit report. In many cases, creditors are prepared to grant a goodwill adjustment as long as your payment history has been excellent or if you have a healthy relationship with them.
This process is relatively simple: write a letter to your lender explaining why you paid late. Request they excuse the late payments and reassure them it won’t happen in the future. If they do accept to forgive the late payments, your creditor will resolve your credit report accordingly.
Creditors don’t regularly forgive late payments, but it doesn’t cost you anything to at least try. If your creditors receive and agree to your goodwill letter’s terms, make certain you obtain an agreement in writing to hold your creditors accountable.
Use a Pay for Delete Letter to Negotiate
If you don’t have a decent history with the lender, or if your account has already been sent to a collections agency, you should contemplate sending a pay for delete letter.
This letter is powerful and should be used as a negotiation tool to offer full payment of the account to eliminate the adverse mark. You can also sign up for automatic electronic payments to guarantee future payments are not late.
A pay for delete letter should explicitly include what you’re proposing (full payment, autopay), what you expect in return (ceased reporting on the late payment status, debt marked as paid), and the date you’d like a reply.
How to Remove Incorrect Late Payments
It’s not unusual to find incorrect information on your credit reports. Suppose you discover a mistakenly reported late payment on your credit report. In that case, you’re entitled by the Fair Credit Reporting Act (FCRA) to demand the credit reporting agencies substantiate it, and if found to be a mistake, remove it. There are a few various ways to go about this.
If you discover any credit report errors, you should file a dispute with the credit bureau that generated the report. You can also dispute the error with your creditor.
Begin this process by sending a dispute letter via certified mail to each credit bureau that reported the error. The dispute letter should distinctly state the adverse information you’re disputing, include any documentation demonstrating the inaccurate information, and be sure to demand that the item is fixed or deleted from your credit report.
After receiving your certified dispute letter, a credit bureau or creditor has 30-45 days to investigate the claim. Once the investigation is complete, the organization notify you of the results.
If the credit bureau or creditor has proof that the reporting data is accurate, the information will stay on your credit report. However, if they agree that the data is incorrect, they must remove it from your credit report.
When Are Late Payments Reported?
Lenders ordinarily report late payments to the credit bureaus once your account has been 30 days late or more. The later you are on making your payment, the more it will decrease your credit score.
Do Late Payments Affect Your Credit Score
According to Experian, a single late payment can decrease a 785 credit score by 95 – 110 points and a 685 credit score by 70 – 90 points. Falling behind on multiple payments in one month has a much more significant impact on your credit score.
How Long Do Late Payments Remain on Your Credit
Late payments generally remain on your credit report for up to seven years and negatively impact your credit score as long as they’re present. That is seven years of struggling for new credit and paying higher interest rates. Though, there are action items you can accomplish to remove those late payments from your credit report.
Will Paying Off a Debt Remove a Late Payment from my Credit History?
Choosing to pay off your debt is an option to contemplate if your lender or collection agency won’t negotiate with you. However, paying off the debt alone won’t remove it from your credit report. It may remain on your credit report for up to seven years.
That being said, it’s more beneficial to have a debt reported as “paid” rather than a “charge-off.” Having a charge-off in your credit history is a red flag that says to lenders you are high risk, making it difficult to get approved for new credit accounts.
Hire a Professional to Remove Late Payments
To make the process more manageable, you can hire a credit repair organization to help you dispute inaccuracies on your credit report. Credit repair experts have the expertise, understanding, and, most importantly, the time available to assist you through the credit report dispute process from beginning to end.