If you’re attempting to fix credit errors, you may want to know how to remove late payments from credit reports – even when you’ve legitimately earned that late payment notation.
The good news is most negative items on credit reports can be disputed.
And, there are two different sources where negative credit can be disputed ⏤ the creditor and the consumer reporting agencies (CRA). Both sources require two very different strategies.
The reason you should remove late payments from credit reports is that late payments are extremely detrimental to credit scores.
A single 30-day late payment can lower a FICO score up to 110 points.
Considering how late payments impact credit scores, it’s worth the effort to remove them.
How to remove late payments with the creditor
Goodwill Letter. Infrequent, rare late payments can be deleted by the original creditor. Write a goodwill letter and request the creditor remove the late payment. Many times creditors, as a gesture of good customer service, will remove late payments, especially if you have been a good customer in the past.
Multiple Late Pays. Multiple late payments can actually work in your advantage. If you have an account with 30, 60, 90 and even 120 late payments and it has not been charged off, offer to bring the account current in exchange for deletion of the late payments. You have the leverage which is the money your creditor wants. Their alternative would be to charge-off the account.
Why not rehabilitate the account and save your credit score. It never hurts to ask but always get all negotiations in writing! In the event the account is more than 180-days late, the creditor may charge off the account, report it to credit bureaus as a charge off and transfer or sell it to a collection agency.
Proof of Payment. A creditor may agree to delete a late payment if you have proof of a timely payment such as a canceled check. Make your request in writing and it may help if you let them know you are trying to make a big purchase like an automobile or mortgage. Creating an urgency will sometimes get you a positive response.
Identity Theft. Unfortunately identity theft has become a huge problem in today’s Internet savvy world. Catching up to the latest identity theft scheme is like playing wack-a-mole. If you’ve experienced late payments due to identity theft the federal government has a process to clear up your credit. Start here to get familiar with the steps you can take to remove late payments as a result of identity theft.
Online Bill Payment. The advent of online bill pay is actually a very good reason for internal investigations with your credit card companies. Online or automatic bill pay can have software glitches or, perhaps the service was offline for maintenance when you attempted your payment. A payment could have been paid one day but credited up to 2 to 4 days later.
Dispute “account paid on time” with the credit bureaus but also contact your creditor and explain the issue and politely request they correct the negative entry with the credit bureaus to reflect “paid/never late.”
Utilize the Fair Credit Billing Act to dispute directly with the creditor if you have “open end” credit accounts and want to dispute fraudulent or unfair credit charges.
How to remove late payments with the credit bureaus
The “Never Late” Dispute. Disputing a late payment by stating you were never late may result in two different outcomes: (1) CRA will contact the creditor and get verification to confirm the listing or; (2) the CRA will contact the creditor, the creditor may fail to respond within (30) days which results in the listing being converted to a “positive status.”
The Factual Error Dispute. As an alternative to the “Never Late” dispute look for factual errors you can dispute. Is the account balance, late payment amount, and dates being accurately reported? If not, dispute the errors and request a deletion, not a correction. Are the credit reporting agencies reporting a delinquent amount of zero ($0)? If so, how can you be delinquent for nothing? Request a deletion.
The Charge-Off Dispute. Has the account been charged-off. If so, no late payments should be reporting after an account has been charged-off or closed. This is a factual error you can dispute and request a deletion.
Is the date the account was charged-off or closed correct or being reported at all? Are the dates of the late payments correct? Find out more about how to remove charge-offs from credit reports.
Do not give them the correct information, dispute and ask for a deletion of the listing. It is the credit reporting agencies job to investigate.
Recent late payments carry more weight
FICO considers how recent the late payments are, how severe the late payments are, and how frequently the late payments occur.
The most recent 2-year late payments are more damaging to FICO score than late payments which occurred a long time ago.
While FICO remains a mystery as to exactly what makes up a credit score, we do know 35% of your credit score is determined by payment history and recent actions are considered more indicative of your current creditworthiness.
Isolated late payments with FICO Score 8 system
If a creditor is using FICO 8 version of credit scoring then an isolated late payment will not be as detrimental to your score under certain conditions. FICO® Score 8 can be more forgiving with an isolated late payment as long as other accounts are in good standing.
Most recent FICO Scoring model 10 and 10T
FICO revises its scoring model every few years, but lenders are not required to update their credit scoring systems. FICO Score 10 and 10T are the most current models.
But the most widely used version remains FICO score 8. You can get a copy of all versions of your FICO scores, including specialized auto loan and mortgage loan scores at myFICO.com.
Final thoughts
Credit repair is a process that doesn’t occur overnight. Professional credit repair companies can assist in removing late payments.
Engaging a professional credit repair company can offer several benefits:
- Expertise and Efficiency: Credit repair companies have specialized knowledge of credit laws and dispute procedures. They can quickly identify errors or inaccuracies on your credit report and effectively challenge them, saving you time and effort.
- Time-Saving: Repairing credit on your own can be time-consuming, involving research, correspondence, and follow-ups. Credit repair companies handle these tasks, freeing up your time for other priorities.
- Improved Negotiation Skills: Credit repair professionals often have experience negotiating with creditors and collection agencies to remove negative items from your report or settle debts for less than the full amount owed.
- Legal Protection: Some credit repair companies employ attorneys who can provide legal advice and representation if necessary, ensuring your rights are protected throughout the process.
- Personalized Guidance: Reputable credit repair companies offer personalized plans tailored to your specific credit situation, providing guidance and support as you work towards improving your credit score.
- Faster Results: Due to their experience and streamlined processes, credit repair companies may be able to achieve faster results than attempting to repair your credit on your own.
If you’re struggling to improve your credit score on your own or if you simply prefer to have expert assistance navigating the complexities of credit repair, professional help can be beneficial to your goals.
