How to Remove a Late Payment From Your Credit Report

Late payments appearing on a credit report can significantly impact an individual’s financial standing, potentially lowering credit scores and affecting access to future credit opportunities. These negative marks indicate a borrower’s inability to meet financial obligations on time, which lenders view as an increased risk. While a single late payment might seem minor, its presence can influence creditworthiness for an extended period. Addressing these entries requires a clear understanding of the reporting system and specific steps available to consumers.

Preparing Your Information

Gathering all relevant information is an important first step. Obtain a copy of your credit report from each of the three major credit reporting agencies: Equifax, Experian, and TransUnion. AnnualCreditReport.com is the official source for free annual credit reports, allowing access to one free report from each agency every twelve months. You can request all three reports at once or space them out throughout the year to monitor your credit more frequently.

Once you have your credit reports, carefully review each one to identify the specific late payment entry. Note the creditor’s name, the exact date of the delinquency, and how the late payment is reported (e.g., 30, 60, or 90 days past due). Cross-reference this information with your personal financial records, including bank statements, payment confirmations, or account history directly from the creditor. This verification helps determine if the reported late payment is accurate or if an error occurred. This foundational work is important for deciding the most appropriate course of action.

Disputing Inaccurate Entries

If your credit reports reveal an inaccurate late payment entry, the Fair Credit Reporting Act (FCRA) provides consumers the right to dispute such errors. This process can be initiated directly with the credit bureaus or the original creditor that reported the information.

When disputing with a credit bureau, you can submit your dispute online, by mail, or over the phone. For a written dispute, clearly identify the inaccurate entry, explain why you believe it is incorrect, and include copies of any supporting documentation, such as bank statements showing on-time payments or correspondence from the creditor. Send mail disputes via certified mail with a return receipt requested to confirm delivery.

Upon receiving a dispute, the credit bureau is required to investigate the claim within 30 days, though this period can extend to 45 days under certain circumstances. If the information cannot be verified as accurate, the credit bureau must remove or correct the entry.

You can also contact the original creditor directly to dispute an inaccuracy. Provide them with the account details and evidence of the error. The creditor is obligated to conduct a reasonable investigation, typically within 30 days, and if they confirm an error, they must update the information with all credit bureaus they report to. This dual approach of disputing with both the credit bureau and the furnisher can sometimes expedite the correction process.

Requesting a Goodwill Adjustment

When a late payment entry on your credit report is accurate but resulted from an unusual circumstance, consider requesting a “goodwill adjustment” from the creditor. This involves sending a goodwill letter, a formal request for the creditor to remove the accurate late payment as a courtesy.

The letter should maintain a polite and responsible tone, acknowledging the late payment while briefly explaining the extenuating circumstances that led to it, such as a medical emergency or a temporary financial hardship. Emphasize a history of otherwise timely payments on the account, demonstrating that the late payment was an isolated incident and not indicative of your usual financial behavior.

Include specific account details and the date of the late payment in your letter. Direct the letter to the creditor’s customer service or credit reporting department, as they are best equipped to review such requests. Creditors are not obligated to grant goodwill requests, as they are required to report accurate information. However, some creditors may be willing to make an exception, particularly if you have a strong payment history and the incident was a one-time occurrence.

A “pay-for-delete” agreement is sometimes discussed for accurate negative entries, particularly with collection accounts. This involves offering to pay a debt collector a negotiated amount in exchange for removing the negative entry from your credit report. While appealing, it exists in a legal gray area, and credit bureaus discourage the practice because it can undermine reporting accuracy. Debt collectors are not required to agree, and there’s no guarantee they’ll follow through. Newer credit scoring models may also minimize the impact of paid collection accounts, making the effectiveness of a pay-for-delete less certain.