Can a Bank Remove a Late Payment From Your Credit Report?

A late payment occurs when a required payment on a credit account, such as a credit card or loan, is made past its due date. While a payment made a few days late might only incur a late fee, payments become reportable to credit bureaus when they are 30 days or more past due. This reported delinquency can significantly impact a consumer’s credit score, as payment history is a major factor in credit scoring models.

Factors for Late Payment Removal

Several circumstances may lead a bank to consider removing a late payment from a customer’s credit report. One situation involves a bank error, where the late payment was not due to the customer’s oversight but an issue on the bank’s part. This could include processing errors, technical glitches, or misapplied payments that led to inaccurate reporting of delinquency. If documentation supports a bank error, a financial institution is obligated to correct the inaccuracy.

Banks may also offer a one-time removal of a late payment as a gesture of goodwill, particularly for customers with an otherwise excellent payment history. This discretionary action is often considered for long-standing customers who have consistently made on-time payments. Such goodwill adjustments are more likely to be granted when the late payment represents an isolated incident.

In rare, extenuating circumstances, a bank might show leniency regarding a late payment. Severe unforeseen events, such as a natural disaster or a medical emergency, could be presented as reasons for the delay. The bank’s willingness to consider these situations is typically on a case-by-case basis, not a general policy for removal. Proactive communication with the bank before a payment becomes significantly overdue can be helpful.

Requesting Late Payment Removal

Initiating a request for late payment removal requires careful preparation. Customers should gather all relevant information, including the account number, the specific date of the late payment, and a concise explanation of the circumstances that led to it. Any supporting documentation, such as proof of payment if the late mark was an error, should also be collected.

The initial contact with the bank can be made through their customer service line, a secure message portal, or by sending a formal letter. For goodwill requests, a polite and professional tone is recommended. The communication should clearly state the request for removal and, if applicable, emphasize a history of timely payments and the one-time nature of the incident.

When crafting a goodwill letter, it is beneficial to acknowledge responsibility for the late payment while briefly explaining the reason for the oversight. Highlighting loyalty to the bank and expressing a commitment to maintaining a good payment record can strengthen the request. Be concise and avoid excessive personal details, focusing instead on the facts and the desired outcome.

After Submitting a Request

After submitting a request for late payment removal, customers should anticipate a response within a typical timeframe, often several days to weeks. While some banks might respond quickly, others may take longer to review the request and make a decision. It is advisable to keep a record of the submission date and any reference numbers provided.

If a response is not received within a reasonable period, a polite follow-up with the bank is appropriate. This can involve calling customer service or sending another message referencing the initial request. Persistence, while remaining courteous, can sometimes help get the request reviewed.

The bank’s response can vary; they might approve the request, deny it, or offer an alternative solution like an internal note. If removal is approved, confirm the change by checking credit reports from Experian, Equifax, and TransUnion after a few billing cycles. This ensures the negative mark has indeed been deleted and no longer impacts credit standing.

Correcting Inaccurate Late Payments

Addressing inaccurate late payments on a credit report involves a formal dispute process distinct from a goodwill request. An inaccurate late payment can include instances where a payment was made on time but misreported, or mistakenly applied to the wrong account. Identifying such discrepancies often requires reviewing credit reports regularly.

The first step in disputing an error is to contact the bank or creditor directly that furnished the information. The formal dispute should clearly explain the inaccuracy and include any supporting documentation, such as bank statements or payment confirmations. The creditor is required to conduct a reasonable investigation, which can take up to 30 days. If the creditor confirms an error, they must notify all credit bureaus to which they reported the inaccurate information to correct or delete the entry.

Concurrently, or if the direct dispute with the bank is unsuccessful, consumers can dispute the inaccuracy with Experian, Equifax, and TransUnion. The Fair Credit Reporting Act (FCRA) grants consumers the right to dispute inaccurate information on their credit reports. When a dispute is filed with a credit bureau, they are required to investigate the claim within 30 days, or up to 45 days if additional information is submitted. If the investigation confirms the information is inaccurate or cannot be verified, the credit bureau must remove it from the report.