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. These negative marks can lower credit scores, potentially leading to higher interest rates on loans, difficulty securing new credit, or challenges with housing and employment applications. While a late payment generally isn’t reported if settled within 30 days of the due date, beyond that timeframe, it can remain on a credit report for up to seven years. Although the impact on credit scores may lessen over time, the presence of a late payment can still hinder financial goals. Fortunately, several strategies exist to potentially remove or mitigate the effects of these entries, offering pathways to improve one’s credit profile.

Requesting a Goodwill Deletion

A goodwill deletion is a request to a creditor to remove an accurately reported late payment from your credit report. This approach is for isolated incidents, particularly if you have a long history of timely payments with that creditor. It is most effective when the payment was only slightly past due, such as 30 or 60 days late, and you have since re-established consistent on-time payments.

Before drafting a goodwill letter, gather your account number, the exact date of the late payment, and any legitimate reason for the delay, such as a medical emergency or temporary financial hardship. Note your positive payment history with the creditor, demonstrating the late payment was an anomaly.

When writing the goodwill letter, maintain a polite, apologetic, and humble tone. Acknowledge responsibility for the late payment without making excuses, and briefly explain the circumstances. Clearly state your consistent on-time payment history and respectfully ask for a “goodwill adjustment.” Send this letter via certified mail or the creditor’s online messaging system. While success is not guaranteed, a well-crafted letter can sometimes lead to a favorable outcome.

Disputing Inaccurate Information

Disputing inaccurate information involves challenging a late payment entry on your credit report that you believe is incorrect. This differs from a goodwill request because it asserts the information is false. Examples of inaccuracies include payments reported late despite being on time, incorrect payment amounts, or accounts that do not belong to you, possibly due to identity theft.

Obtain copies of your credit reports from all three major credit bureaus: Equifax, Experian, and TransUnion. You are entitled to a free report from each bureau annually via AnnualCreditReport.com. Review these reports to identify any discrepancies regarding the late payment. Gather supporting evidence such as bank statements, canceled checks, payment confirmations, or correspondence with the creditor that proves the information is incorrect.

You can dispute the information directly with the credit bureaus, online, by mail, or phone. When submitting a dispute, provide your contact information, the account number, the specific item being disputed, the reason for the dispute, and copies of your supporting documentation. The credit bureaus are required by the Fair Credit Reporting Act (FCRA) to investigate your dispute within 30 days. They will contact the creditor (the “furnisher”) to verify the information. If the information is found to be inaccurate or cannot be verified, the item must be removed from your credit report.

Alternatively, you can dispute the inaccurate information directly with the original creditor. Send a dispute letter that outlines the inaccuracy and includes your supporting evidence. The creditor is also obligated to investigate the claim within 30 days. If they confirm an error, they must notify all credit bureaus to correct or remove the entry. If a legitimate dispute is denied, you have the right to add a brief statement to your credit report, or you may seek assistance from consumer protection agencies.

Negotiating a Pay-for-Delete

A “pay-for-delete” negotiation is an arrangement where a debtor offers to pay a collection agency or creditor to remove a negative entry from their credit report. This strategy is most commonly applied to accounts that have gone into collections or been charged off by the original creditor, rather than recent late payments. Not all creditors or collection agencies engage in pay-for-delete agreements, as some consider it against their policies.

Before initiating contact, confirm the exact amount owed, the original creditor, and the collection agency’s details. Contact the collection agency and propose a pay-for-delete agreement. Obtain this agreement in writing before making any payment. The written agreement should state that the negative entry will be removed from all three credit bureaus within a specific timeframe, 30 to 45 days, upon receipt of payment.

Once you have the written agreement, make the payment using a certified check or money order, rather than a direct bank transfer. After the agreed-upon timeframe, monitor your credit reports from all three bureaus to ensure the negative entry has been removed. Never pay based solely on a verbal promise, as these are not legally enforceable. This method can improve your credit score by removing older accounts, but it requires careful execution and written confirmation.