How to Remove a Late Payment From Your Credit Report
Master the steps to clear late payment records from your credit report and enhance your overall credit health.
A late payment on a credit account occurs when a payment is made past its due date, typically becoming reportable to credit bureaus once it is 30 days or more overdue. This negative mark significantly impacts a credit score, as payment history is a primary factor in credit scoring models. A single late payment can notably drop a credit score, with the impact varying based on credit history and delay length.
Maintaining an accurate credit report is important for financial well-being. Credit reports influence access to various financial products, including loans, credit cards, and even rental housing. Incorrectly reported late payments can hinder financial opportunities and lead to higher interest rates or denials for credit.
Understanding Your Credit Report and Preparing Your Case
Before attempting to remove a late payment, it is necessary to obtain copies of your credit reports. You are entitled to a free copy of your credit report once every 12 months from each of the three major nationwide credit bureaus: Experian, Equifax, and TransUnion. These reports can be accessed through AnnualCreditReport.com.
Upon obtaining your credit reports, carefully review each one to identify the specific late payment entry. Look for details such as the date of delinquency, the amount that was late, the creditor’s name, and the associated account number.
Gathering relevant documentation is an important preparatory step. Collect account statements, communication records with the creditor (such as emails or call logs), and proof of on-time payments like bank statements or canceled checks. Also, compile personal notes or calendars related to the payment and ensure you have the creditor’s contact information.
Distinguishing between an inaccurate and an accurate late payment is important for determining the appropriate removal strategy. An inaccurate late payment is one reported in error, such as a payment made on time or incorrect information. An accurate late payment genuinely occurred as reported. This distinction guides whether you will dispute the entry or request a goodwill removal.
Disputing Inaccurate Late Payments
If you identify a late payment on your credit report that you believe is inaccurate, you can initiate a dispute process. First, contact the creditor directly to resolve the issue. Provide them with details of the inaccuracy and any supporting documentation that proves your payment was on time or the information is otherwise incorrect.
If direct communication with the creditor does not resolve the issue, you can then dispute the inaccurate information with the credit bureaus. Each of the three major credit bureaus offers online portals for submitting disputes, or you can send a dispute by mail. When submitting a dispute, clearly state the account number, the creditor’s name, and the specific reason the information is inaccurate.
Include copies of any supporting documents, such as bank statements showing on-time payments or correspondence with the creditor. Send mailed disputes via certified mail with a return receipt requested for proof of receipt.
Under the Fair Credit Reporting Act (FCRA), credit bureaus are required to investigate disputes within 30 days of receiving your submission. During this period, the credit bureau will contact the information furnisher (creditor) to verify the accuracy of the disputed item. If the information is found to be inaccurate or cannot be verified, it must be removed or corrected on your report.
Requesting a Goodwill Removal
For late payments that are accurately reported but occurred due to extenuating circumstances, you may consider requesting a goodwill removal. This involves asking the creditor to remove the negative mark as a gesture of goodwill, acknowledging it was an isolated incident. This request is discretionary, meaning the creditor is not obligated to grant it.
When preparing a goodwill request, identify the appropriate contact within the creditor’s organization. Craft a letter that is polite, respectful, and concise. Include your account details and a brief, honest explanation of the extenuating circumstance that led to the late payment, such as a medical emergency or a temporary financial hardship.
Emphasize your history of otherwise consistent and timely payments with the creditor. Reassure them that steps have been taken to prevent future occurrences. Conclude with a polite request for the removal of the late payment from your credit report as a show of goodwill.
Send your goodwill letter through mail or utilize any secure messaging portals the creditor provides. While success is not guaranteed, a well-reasoned and polite request, especially with a strong overall payment history, may be considered. If no response is received within a reasonable timeframe, a polite follow-up may be warranted.
Monitoring Your Credit and Next Steps
After submitting a dispute or goodwill request, it is important to regularly monitor your credit reports to track the outcome. Check your reports from all three major credit bureaus to see if the late payment entry has been removed or updated as requested.
If your initial dispute or goodwill request is denied, further action may be necessary. You can provide additional documentation to the credit bureaus or the creditor to support your claim. In cases where you believe the bureaus or creditors are not complying with legal requirements, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).
Ongoing credit monitoring extends beyond resolving specific issues. Regularly reviewing your credit reports helps you identify any new inaccuracies promptly and stay informed about your overall credit health.