How to Remove Late Payments From Your Credit Report

Late payments on a credit report significantly impact an individual’s financial standing. These negative entries indicate a failure to meet credit obligations, which lenders view as an increased risk. Since payment history is a major factor in credit scoring, a late payment can decrease credit scores, making it challenging to secure new loans, credit cards, or favorable interest rates.

Disputing Inaccurate Late Payment Entries

Identifying and challenging inaccurate late payment entries on a credit report is a first step. Obtain a copy of your credit report from Experian, Equifax, and TransUnion. Consumers are entitled to a free weekly report from each bureau through AnnualCreditReport.com. Review each report to identify incorrect entries, such as payments recorded as late when they were on time, or accounts that do not belong to you.

Once inaccuracies are identified, gather supporting evidence. This evidence can include bank statements showing timely payments, canceled checks, payment confirmations, or account statements. Document the specifics of the inaccurate entry, including the creditor’s name, account number, and the date(s) of the disputed late payment. This detailed information will streamline the dispute process and provide clear context for the credit bureaus.

File a dispute with each credit bureau reporting the inaccuracy. This can be done online, by mail, or by phone. When submitting a dispute, clearly state the account details, pinpoint the inaccuracy, and include copies of all supporting documentation. The Fair Credit Reporting Act (FCRA) requires credit bureaus to investigate disputes within 30 to 45 days, contacting the creditor to verify the disputed information. The bureau will inform you of the results and update your credit report if the information is found to be inaccurate or unverifiable.

Requesting Goodwill Deletion for Accurate Payments

Even if a late payment is accurate, a “goodwill deletion” can lead to its removal. This involves a direct appeal to the creditor, asking them to remove the negative mark. This approach is effective if you have an otherwise perfect payment history, are a long-standing customer, or if the late payment was a one-time incident due to an explainable circumstance.

Draft a polite and concise letter to the creditor. Include your account number, the date of the late payment, and a brief explanation for the lateness. Emphasize your strong payment history and commitment to timely payments. Maintaining an appreciative tone throughout the communication can increase the likelihood of a favorable response.

Submit the goodwill request in writing, often via mail or a secure message portal. Creditors are not obligated to grant a goodwill deletion, but some may, especially for valued customers. If granted, monitor your credit report to ensure the late payment is removed.

Negotiating Pay-for-Delete Agreements

For accounts in collections or charged off, a “pay-for-delete” agreement can remove negative entries. This is an arrangement where a collection agency or original creditor agrees to remove a derogatory item from your credit report in exchange for debt payment. Not all creditors or collection agencies accept pay-for-delete agreements.

Obtain the pay-for-delete agreement in writing before making any payment. This written agreement should detail the account number, the specific negative entry to be deleted, the agreed payment amount, and the timeframe for deletion after payment. Without a written agreement, there is no guarantee the collection agency will uphold their promise.

Contact the collection agency or original creditor to propose the agreement. Maintaining a meticulous record of all communications is advisable throughout this negotiation process. Make payment only after receiving and verifying the written agreement. After payment, monitor your credit reports to confirm the deletion has been processed.

Understanding When Late Payments Naturally Fall Off

Negative information, including late payments, does not remain on a credit report indefinitely. Most negative entries, such as late payments, remain on a credit report for approximately seven years. This period begins from the date of the initial delinquency.

The removal of aged late payments is an automatic process; no active steps are required. While seven years can seem long, the impact of a late payment on credit scores diminishes over time. Newer late payments have a more significant negative effect than older ones.

Even if other removal methods are unsuccessful, the natural expiration of a late payment will eventually occur. Continual monitoring of your credit reports is recommended to ensure aged late payments are accurately removed once their reporting period has ended.