Can You Remove a Late Payment From Your Credit Report?

Credit reports detail an individual’s borrowing and repayment history. These reports are compiled by credit bureaus and provide lenders a snapshot of financial behavior. A late payment notation can significantly influence how a credit report is perceived.

Understanding Late Payments on Credit Reports

A late payment refers to any payment made beyond the due date. Creditors regularly furnish payment data to the three major credit bureaus: Equifax, Experian, and TransUnion, monthly.

Creditors often allow a grace period before classifying a payment as officially late. After this grace period, if the payment remains outstanding, the creditor reports the account as delinquent. The credit report entry includes the account name, late payment date, and delinquency degree (30, 60, 90, or 120 days past due).

Each additional 30-day period of non-payment leads to a more severe late payment notation. These entries remain on a credit report for up to seven years from the original delinquency date.

Requesting Removal via Goodwill

Consumers can request a late payment removal via a “goodwill” letter sent to the creditor. This formal request acknowledges responsibility and politely asks for removal as a gesture of goodwill. This approach is most effective with a history of timely payments to that creditor.

Gather specific account information, including the account number, late payment date, and creditor’s full name. Include any legitimate reasons for the late payment, such as a medical emergency or administrative error, as a brief explanation. Emphasizing a strong payment history can strengthen the request.

The letter should maintain a polite tone, clearly stating the removal request. Avoid accusatory language; focus on positive payment behavior. For instance, mentioning several years of on-time payments before the single late event can highlight a commitment to financial obligations. Conclude with a clear call to action.

Send the letter to the creditor’s customer service or credit reporting department. Sending the letter via certified mail with a return receipt provides proof of delivery. Anticipate a response within a few weeks to a month; success is not guaranteed, as creditors are not obligated to remove accurate information.

Disputing Inaccurate Late Payments

Consumers can dispute inaccurate late payment entries on their credit report. Inaccuracies include payments reported late despite being on time, incorrect amounts, identity theft, or duplicate entries.

Gathering specific evidence is crucial, as the burden of proof generally rests with the consumer. Evidence includes bank statements, cancelled checks, payment confirmations, or creditor correspondence. For identity theft, a police report or Federal Trade Commission (FTC) identity theft report is necessary.

Dispute inaccurate late payments with both credit bureaus and the data furnisher (creditor). Initiate disputes with Equifax, Experian, and TransUnion online, by mail, or phone. Provide personal identifying information, the account number, a clear explanation of the inaccuracy, and copies of supporting documentation.

Once a dispute is filed with a credit bureau, they must investigate within 30 to 45 days. The credit bureau contacts the data furnisher to verify the information. If the data furnisher cannot verify or confirms inaccuracy, the credit bureau must remove or correct the entry. Consumers are notified of the outcome by mail within this timeframe.

Also dispute the inaccuracy directly with the data furnisher. Send a letter, ideally via certified mail, detailing the inaccuracy and providing evidence. Disputing directly with the creditor can sometimes lead to a quicker resolution, as they are the original source of the information. Both credit bureaus and data furnishers have obligations under federal law, such as the Fair Credit Reporting Act (FCRA), to investigate and correct inaccurate information.

Managing Accurate Late Payment Entries

If an accurate late payment cannot be removed, focus on mitigating its long-term impact. The most effective strategy is establishing a consistent history of on-time payments. Each subsequent on-time payment demonstrates financial responsibility and begins to dilute the negative effect of the past late payment.

Payment history is the most significant factor in credit scoring models, accounting for approximately 35% of a FICO Score. Accumulating a strong record of timely payments on all accounts is paramount. Over time, newer, positive entries will gradually overshadow older, negative ones, leading to an improvement in the credit profile. The older the late payment becomes, the less impact it has on a credit score.

Beyond consistent on-time payments, other positive credit habits contribute to a healthy credit profile. Keeping credit utilization low, generally below 30% of available credit, helps demonstrate responsible credit management. For example, on a $1,000 credit card limit, maintaining a balance under $300 is beneficial. Avoiding new, unnecessary debt and maintaining a diverse mix of credit accounts, such as installment loans and revolving credit, can also positively influence a credit score.