Can a Credit Card Company Remove a Late Payment?

A late payment on a credit card can negatively impact a credit profile, affecting future financial opportunities. Understanding how these entries are reported and the available avenues for addressing them is important. This article explores the details of late payments and how they might be removed or corrected.

What a Late Payment Means

A credit card late payment occurs when the minimum payment is not received by the due date. While a payment a few days late might incur a fee, it typically only appears on a credit report if it is at least 30 days past due. Creditors generally report these delinquencies to the major credit bureaus (Experian, Equifax, and TransUnion) in 30-day increments, such as 30, 60, 90, or 120 days late.

Once reported, a late payment remains on your credit report for up to seven years from the date of delinquency. This negative mark signals increased risk to potential lenders, influencing their decisions. While the impact lessens over time, a recent late payment can affect your ability to secure new credit or obtain favorable interest rates.

How to Request a Goodwill Removal

A goodwill removal is a request to a credit card issuer to remove an accurate, but negatively impacting, late payment from your credit report as a courtesy. This is an appeal for leniency based on your payment history and relationship with the creditor, not a dispute over incorrect information. Success is not guaranteed, as creditors are not obligated to grant such favors.

Before making a request, gather essential information: your account number, the specific date of the late payment, and your overall payment history with the issuer. A brief, honest explanation for the isolated late payment, coupled with a commitment to future on-time payments, can strengthen your appeal. Factors influencing a credit card company’s decision include a strong payment history, the late payment being an isolated event, and a long-standing relationship with the issuer.

You can make a goodwill request by writing a polite letter, calling customer service, or using an online message center. Maintain a courteous, professional, and concise tone. Clearly state your request for a goodwill adjustment, briefly explaining the circumstances and emphasizing your commitment to responsible financial behavior. The response timeline can vary, and it may require follow-up.

How to Dispute an Incorrect Late Payment

Disputing an incorrect late payment is a formal process for correcting inaccurate information on your credit report, distinct from a goodwill request. This applies when a late payment was reported in error, such as a payment made on time, a duplicate report, or an entry not belonging to your account.

To initiate a dispute, gather supporting evidence of the inaccuracy. This might include bank statements showing on-time payment, payment confirmations, or canceled checks. If due to identity theft, a police report or Federal Trade Commission Identity Theft Report is relevant.

You can dispute inaccurate information directly with the credit card company or with each major credit bureau (Experian, Equifax, TransUnion) showing the error. Disputes can be submitted online or via mail, requiring account details, a clear explanation of the inaccuracy, and copies of supporting documentation. Under the Fair Credit Reporting Act (FCRA), credit bureaus have 30 to 45 days to investigate and resolve your dispute.

After a Late Payment is Removed or Corrected

If a late payment is successfully removed from your credit report, either through a goodwill request or a formal dispute, the entry will no longer appear as a negative mark. This positive change can take time to reflect across all your credit reports. Once processed by the credit card company or credit bureau, it can take a few days to several weeks for the updated information to propagate to all three major credit reporting agencies.

Removing a negative item like a late payment can positively influence your credit score. While a specific increase is not guaranteed due to credit scoring model complexities, eliminating a derogatory mark improves your credit profile’s overall health. A cleaner credit report indicates more reliable payment behavior, viewed favorably by lenders.