How To Remove Late Payments From Your Credit Report

If you are looking to rebuild your credit, it is practicable to remove late payments from your credit report in some cases.

A credit score forecasts and depicts if on-time payments will be made or not. A delay in any amount will pull down your FICO credit score.

Ill-timed payments depreciate your credit score. A dispute should be filed with your lending institution or credit bureau to remove the disadvantageous listing in case of an erroneous entry in your credit report. If the dispute is being filed via email, ensure that a certified email address is being used, and a return receipt should be requested. Such entries are relatively easier to amend as they do not take up much of your time.

However, suppose the outstanding dues have been recorded correctly. In that case, the derogatory marks on your credit score cannot be removed before seven years as it can be difficult and time-consuming. 

Tardy payments may appear in your credit report for the following reasons:

1. The lender has a valid report of your late payment.
2. There was an error from the lender or credit bureau’s end in recording the payment and adding it to your credit report.

The process of amending credit scores is lengthy and may take several weeks to resolve, but it can be sped up using ‘rapid scoring’ – paying to update your report faster. It makes more sense to resort to a faster way if you’re buying a home or any other crucial deal.

It should be noted that the credit reporting agencies are supposed to fix these errors, and not to do so is breaching the FCRA (Fair Credit Reporting Act).

Review Your Credit Reports

Your credit reports should be reviewed frequently by the three big consumer reporting agencies or credit bureaus – Equifax, Experian & TransUnion. 

Their analysis can help you determine whether something is not right such as wrongly reporting a delayed payment.

Delayed payment is usually linked to a credit account. The credit bureau reviewing the credit report may also show how late payment was made. 

It is advised to get your report evaluated from all three main consumer credit bureaus as all copies of your report will not be alike.

Watch Out For Incorrect Or Old Late Payments

Keep an eye out for late payments, which may be wrongly recorded in association with your account for a number of reasons:

1. Timely payment of bills but recorded as late regardless

An incorrect and late entry for your timely payment can be recorded by accident. As a matter of course, try to give evidence that the bill was paid on time.

2. If arrears were made over seven years ago

Late payment, if recorded correctly, should be removed from your financial record after seven years. The appearance of a late payment made seven years ago should be disputed and amended at the earliest.

Dispute the error

A dispute can be filed with your lending institution or credit bureau if an old ill-timed payment or an incorrect one is recorded in your credit report. Filing a dispute will remove the disadvantageous listing in case of erroneous entries in your credit report. 

The mistake can also be disputed with the creditor who sent out your analysis to the bureau, for instance, the lender, credit card issuer, or debt collection agencies. 

The creditors will normally have a month to look into the case at hand. The creditor has to inform all relevant credit bureaus to upgrade or eradicate the data in case of any changes.

All credit bureaus which have dated information regarding your credit report should be informed and disputed to investigate your claim and make the necessary updates. It typically takes a month for bureaus to look into the declaration.

What if it’s not a mistake?

The chances of removing a late payment that has been recorded correctly on your credit report are narrow.

A speaker at TransUnion reportedly said, “If late payment information is indeed accurate and properly reported by a lender, then it cannot be removed from a consumer’s report by the credit-reporting agency.”

A valid reported late payment cannot be removed from your credit report, and any information claiming to do this is most likely to be a scam. Overdue and outstanding payments can be avoided if full and timely payment of bills is practiced. This can be done by setting up automated payments for your credit account. 

Derogatory marks on your credit score due to late payment cannot be removed before seven years, leaving you hanging until the late payment claims drop. However, if you have been looking into rebuilding your credit score with responsible use, a late payment will have a lesser impact on your credit.

Acquiring a loan with Low Credit

Making delayed payments will lower your credit score, but that does not mean it makes you unable to receive money from a lender. Payday lenders should be avoided to steer clear of high-interest rates and other charges.

A co-signer’s assistance may be needed to get certain types of loans approved. Institutions lending money will analyze the co-signer’s credit scores and income to find out their potential of paying back the loan. In case of a late payment from your end, the co-signers credit score could be affected too.

Suggestions for Removing Late Payments From Your Credit Report

The “goodwill letter.”

You may have to write a ‘goodwill letter’ addressing the creditor and elucidating why timely payments could not be made. Your account information may not be updated as the letter may not be taken into consideration because creditors report the correct details and statistics to credit bureaus.

Your lender may be able to resolve a late payment issue before it is recorded in your credit report.

 “Pay-for-delete”

Another way to remove late payments from credit reports is known as ‘pay-for-delete.’ Debt collectors usually offer the ‘pay-for-delete’ services to remove late payment pulls from your credit report at a certain price, paying off the account.

Opting for this course is not advised as your money can be saved and instead be used to file a dispute regarding incorrect information yourself.

The pay-for-delete option will at best eliminate the paid collections account from your record, but not the delayed payments or original account.

Why do Late Payments matter?

An account holder’s payment and transaction history are vital elements determining their credit score.

Late payments account for derogatory marks on your report, and they stay on your record for about seven years.

A dispute can be filed with your lending institution or credit bureau to remove inaccurate late payment claims on your credit report.