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

Consumers often wonder if a late payment can be removed from their credit report. While lenders must report accurate information, a late payment entry can sometimes be removed through a process known as a “goodwill adjustment” or “courtesy deletion.” This action is entirely at the lender’s discretion and is not a guaranteed outcome. Lenders are not legally obligated to remove accurate negative information from a credit report.

Lender’s Ability to Remove Late Payments

A “goodwill adjustment” or “courtesy deletion” refers to a lender’s discretionary decision to remove an accurate late payment from a consumer’s credit report. This is distinct from disputing an error, where the late payment entry is factually incorrect. Lenders are not legally compelled to remove accurate negative information, even if requested. The Fair Credit Reporting Act (FCRA) mandates that financial institutions report complete and accurate credit history.

Several factors typically influence a lender’s willingness to grant a goodwill adjustment. A consistently excellent payment history with that specific lender is significant. This includes a long-standing relationship with a record of on-time payments, making the late payment an isolated incident. Lenders are more inclined to consider requests when the late payment is a first-time occurrence, rather than part of a pattern of missed payments.

The length of the customer’s relationship with the lender plays a role, as a longer history of loyalty and responsible account management can demonstrate creditworthiness. The reason for the lateness is a determining factor; understandable, one-time emergencies like a medical issue, a verifiable travel interruption, or a technical glitch are viewed more favorably than chronic financial mismanagement. The reason provided should not suggest an ongoing risk of future late payments.

Prompt payment after the due date, minimizing the delinquency period, can demonstrate a commitment to fulfilling financial obligations. Each lender operates under its own internal policies regarding goodwill adjustments, meaning there is no universal standard for approval. While some may have clear guidelines, others might have stricter policies, with some larger institutions indicating they do not honor such requests due to reporting requirements.

Information for Your Request

Before contacting your lender to request a late payment removal, gather specific information. Precisely identify the account number(s) associated with the late payment and the exact date(s) the payment was reported as late. Having these details ready streamlines the communication process and helps the lender quickly locate the relevant records.

Prepare a clear, concise, and honest explanation for the late payment. For example, explain that a brief travel period led to an oversight, or a one-time medical emergency temporarily disrupted your payment routine. Framing the reason as an understandable, isolated incident rather than a systemic issue can be beneficial.

Highlight your overall positive payment history with that particular lender. Mention how long you have been a customer and emphasize that this late payment is an anomaly compared to your consistent record of on-time payments. A statement expressing your firm commitment to making all future payments on time reinforces your reliability and reassures the lender of your continued responsible financial behavior.

Have any directly relevant supporting documentation ready, such as a travel itinerary or a medical bill. Do not send these documents unsolicited unless the lender specifically requests them. Ensure you have all pertinent details at hand for when you initiate contact.

Steps to Request Late Payment Removal

Once you have gathered all necessary information, initiate contact with your lender to submit your request. Common communication channels include a direct phone call or a formal written “goodwill letter.”

When calling, maintain a polite and respectful tone, clearly state the purpose of your call, and have your account details and explanation ready. If the initial representative cannot assist, politely inquire about speaking with a supervisor or a department specializing in credit reporting.

A goodwill letter should be professional, concisely state your request for a goodwill adjustment, and briefly explain the circumstances. This letter can be sent via postal mail or through the lender’s secure message portal. An online portal or secure messaging system can offer a traceable record of your communication.

The request should clearly articulate the specific action you are seeking: removal of the late payment entry from your credit report. Maintaining an appreciative and courteous tone throughout your communication is important, as you are requesting a courtesy rather than demanding a right. Your approach and presentation of your consistent history and the isolated nature of the incident can influence the outcome.

After Submitting Your Request

After submitting your request for a goodwill adjustment, patience is necessary as the lender reviews your case. Processing and response times typically range from a few weeks to over a month. The timeframe largely depends on the lender’s internal procedures and the volume of inquiries they receive.

There are several possible outcomes. The lender might agree to remove the late payment. If approved, it may take 30 to 60 days for the update to reflect on your credit reports with Experian, Equifax, and TransUnion.

Alternatively, the lender might decline your request, as the decision rests solely with them. In this scenario, they may or may not provide a specific reason for the denial. They may also request additional information or clarification regarding your situation before making a final decision.

Regularly check your credit reports from all three major bureaus after the expected processing time to verify if the late payment has been successfully removed. You are entitled to a free copy of your credit report from each agency annually through AnnualCreditReport.com.