How to Remove Missed Payments on Credit File

A missed payment means a required payment was not made by its due date. This entry can negatively affect one’s credit score. A lower credit score can restrict access to various financial products and services, including loans, credit cards, and even rental agreements. Addressing these entries is important for managing financial standing.

Understanding Missed Payments on Your Credit File

A missed payment typically occurs when a payment is 30 days or more past its due date. Creditors generally do not report a payment as late to the credit bureaus until it has exceeded this 30-day threshold, though late fees may apply sooner. The severity of the missed payment is often categorized by its duration, such as 30, 60, 90, or 120+ days late, with longer delays causing more significant damage to credit scores.

These missed payments appear on a credit report with specific notations indicating the account, the date of the missed payment, and the degree of delinquency. Payment history is a primary factor influencing credit scores, accounting for a substantial portion of the score calculation. Consequently, even a single missed payment can significantly lower a credit score, particularly for individuals with an otherwise strong credit history.

The negative impact of a missed payment diminishes over time, but the entry remains on a credit report for a considerable period. Generally, a missed payment can stay on a credit report for up to seven years from the date the account was first reported delinquent. This seven-year timeframe applies regardless of whether the account is eventually paid off or remains open.

Identifying Inaccurate Missed Payments

Regularly checking credit reports helps identify inaccuracies. Errors on a credit report, including mistakenly reported missed payments, can negatively impact credit scores and hinder financial opportunities. Proactive review allows for timely correction of such discrepancies.

Individuals are entitled to free credit reports from Experian, Equifax, and TransUnion. The official source for these reports is AnnualCreditReport.com. This centralized website allows consumers to obtain their reports at no cost, and as of October 2023, weekly reports are permanently available.

When reviewing credit reports, scrutinize them for errors related to missed payments. Look for payments reported as missed when they were, in fact, made on time, or instances where the payment amount is incorrect. Discrepancies might also include incorrect dates of missed payments, accounts that do not belong to you, or duplicate entries for the same missed payment.

Before disputing, gather documentation supporting your claim. This evidence could include bank statements showing timely payments, payment confirmation emails or receipts, or canceled checks. Any communication with the creditor that acknowledges a payment was made or confirms incorrect reporting can also be valuable. This preparatory step strengthens your case when disputing the information.

Disputing Inaccurate Missed Payments

Once inaccuracies are identified and evidence collected, formally dispute the information. Disputes can be filed directly with the credit bureaus (Experian, Equifax, and TransUnion) reporting the inaccurate item. Most bureaus offer online dispute processes, which can often be the fastest method, or allow disputes to be submitted by mail using specific forms.

You can also dispute directly with the original creditor. Both the credit bureaus and the furnishing creditor have responsibilities under federal law to investigate disputes. Submitting a dispute to the creditor can sometimes be effective, and if they verify an error, they are required to notify the credit bureaus to update the information.

After a dispute is filed, credit bureaus typically have 30 days to investigate the claim, though this period can extend to 45 days if additional information is submitted during the investigation. During this time, the bureau will contact the data furnisher to verify the accuracy of the disputed item. The outcome of the investigation will then be communicated to you, which may result in the removal, modification, or verification of the entry.

If the dispute results in the removal or modification of the inaccurate information, the credit report will be updated accordingly. If the dispute is denied but you still believe it is incorrect, you have further options. You can request that a brief statement of dispute be added to your credit file, explaining your perspective on the entry. This statement will then be visible to anyone who accesses your credit report.

Addressing Legitimate Missed Payments

When a missed payment is accurate but you wish to have it removed, a goodwill letter can be an avenue. A goodwill letter is a formal request sent to the original creditor asking them to remove a legitimate late payment from your credit report as an act of “goodwill.” This approach is most effective for isolated incidents, especially if you have a strong payment history or experienced a genuine hardship.

When crafting a goodwill letter, maintain a polite tone, acknowledging responsibility. The letter should include a brief, sincere explanation for the lateness, such as a temporary financial difficulty or an administrative oversight. It should also highlight any subsequent on-time payment behavior, demonstrating a renewed commitment to financial obligations. The letter should conclude with a clear request for a goodwill adjustment or removal of the late payment entry.

Goodwill letters should be sent directly to the original creditor, not the credit bureaus. While there is no guarantee a creditor will grant the request, as they are not legally obligated, it is often worth attempting for a single, isolated late payment. Success often depends on the creditor’s policies and your overall payment history with that institution.

Another concept is a “pay for delete” agreement. This involves paying an outstanding debt to a collection agency in exchange for removing the negative entry from your credit report. While such agreements exist, they operate in a legally ambiguous area. Credit bureaus discourage this practice because it can undermine the accuracy and integrity of credit reports.

Pay for delete agreements carry risks and are generally not recommended. There is no guarantee that a collection agency will honor such an agreement, even if payment is made, as they are obligated to report accurate information. Additionally, even if a collection account is removed, the original creditor’s negative reporting, such as missed payments or charge-offs, may still remain on the credit report.