Can You Dispute Late Payments on Your Credit Report?
Uncover effective ways to address inaccurate late payments on your credit report and manage their impact.
It is possible to dispute late payments reported on your credit report, but success depends on specific circumstances. A late payment signifies an account payment made 30 or more days past its due date, after which it may be reported to major credit bureaus. This reporting can significantly impact credit scores, as payment history is a major factor in their calculation. The degree of impact varies based on how late the payment was and the individual’s credit history.
Grounds for Challenging Late Payments
Disputes regarding late payments are valid only when the reported information is inaccurate, incomplete, or cannot be verified. A genuinely late payment, accurately reported, cannot be removed through the formal dispute process. The Fair Credit Reporting Act provides consumers the right to dispute errors on their credit reports.
Inaccuracies that warrant a dispute include:
Payment made on time but reported as late.
Late payment belonging to someone else, due to identity theft or a mixed credit file.
Incorrect date of delinquency or inaccurate amount owed.
Fraudulent account.
Account discharged in bankruptcy but still showing active late payments.
Regularly review credit reports to identify errors promptly. Consumers can obtain a free copy of their credit report annually from each of the three nationwide credit bureaus. Identifying these inaccuracies is the initial step before a formal dispute.
Disputing with Credit Bureaus and Creditors
Initiating a dispute for an inaccurate late payment involves a structured process and thorough preparation. Before contacting credit reporting agencies or creditors, gather all relevant information and documentation, including:
Personal identification.
Account numbers.
Proof of on-time payment (e.g., bank statements, canceled checks, payment confirmation emails).
Records of prior communication with the creditor.
A copy of the credit report showing the inaccurate entry.
Once documentation is assembled, initiate a dispute directly with Experian, Equifax, and TransUnion. Methods for dispute include online portals, mail, or phone. When submitting, clearly state the specific account, describe the inaccuracy, and include all supporting evidence. Credit bureaus are required to investigate within 30 to 45 days, contacting the creditor to verify accuracy.
The investigation can lead to several outcomes:
Information deleted if it cannot be verified or is inaccurate.
Information modified if partial inaccuracies are found.
Information verified if the creditor confirms its accuracy.
If the dispute with the credit bureau is unsuccessful, or if you have direct proof of an error, contact the original creditor directly. Provide them with the same detailed information and evidence. Creditors are obligated to conduct a reasonable investigation into disputes concerning information they reported. If the creditor agrees there was an error, they must update the credit bureaus to correct or delete the inaccurate late payment.
If the dispute remains unresolved, or if a previously removed item is re-reported, you have further recourse. You can resubmit the dispute with additional documentation, or request the credit bureau add a statement of dispute to your credit report, explaining your position. This statement will be visible to anyone reviewing your credit file.
Other Strategies for Addressing Late Payments
For late payments that are legitimate and accurately reported, and therefore cannot be removed through formal dispute processes, other strategies exist to mitigate their impact. One common approach involves sending a goodwill letter to the creditor. This is a polite request asking the creditor to remove a legitimate late payment as a gesture of goodwill.
Goodwill letters are most effective for isolated incidents, especially if you have an otherwise strong history of on-time payments with that creditor. It is helpful to include a brief, plausible explanation for the single late payment, acknowledge responsibility for the missed payment, and respectfully request its removal, emphasizing your consistent payment history. However, it is important to understand that a goodwill removal is a request and is not guaranteed; creditors are not obligated to grant it.
Another strategy, though less common for direct late payment removal, involves negotiating with the creditor. This might occur if an account is brought current or paid off, and you can inquire about the possibility of the late payment being removed as part of the resolution. A “pay for delete” scenario, where a consumer offers to pay a collection or charge-off in exchange for its removal from the credit report, is generally not a standard practice, and creditors are not required to agree to such terms.
Regardless of whether a late payment can be removed, building a consistent history of on-time payments going forward is a powerful strategy. Over time, the impact of older late payments on your credit score naturally diminishes. Regularly paying all bills on time demonstrates financial responsibility and can significantly improve your credit health, gradually offsetting the negative effect of past delinquencies.