We have all had it happen before – a credit card or loan payment slips our minds, we forget that we need to pay it, and suddenly, the calls start coming in, reminding you about your past-due balance. Possibly, you lost your job or had other financial hardships fall upon you. Either way, when you pull your credit report, you see the derogatory remark. While for some, this may not be the end of the world, for others, this can be a serious issue.
Thankfully, there are several ways to have a late payment removed from your credit report, depending on your current circumstances and the funds you have available to make amends with your creditor. We have collected a variety of methods for removing late payments off of your credit report, along with general information on how derogatory comments affect your credit report, and for how long they are reflected on your credit report.
What Are Late Payments and Why is One on My Credit Report?
At times, you may see a late payment show up on your credit report. However, many individuals aren’t entirely sure what constitutes a late payment – for instance, when a late payment will show up on your credit report, or why it is there. Understanding this is important, as being able to identify if the late payment remark on your report is legitimate is the first step in filing a dispute with your creditor, at need.
Late payments, in most cases, are payments that are more than 30 days past due. However, this does not mean that if you are two or three days late on your monthly credit card payment that this will show on your credit report. Creditors do not report your account as past due to major creditors until you have gone 30 days past your first missed due date – meaning that while you will still accrue late fees and interest charges, your account is typically not reported as past due until you have missed your second payment.
If you see a late payment on your credit report, it typically means that you have gone past your initial due date on a credit account by at least 30 days. In many cases, these claims on your credit report are correct – it may have been an oversight on your part, or due to financial hardship. However, it is exceptionally important that you address this as early as possible, as derogatory remarks can drastically lower your credit score.
What If The Report is a Mistake?
There are several ways that a report can be a mistake – and if you think there is an issue with your credit reporting, it is best to reach out to the creditor directly to begin an investigation of the matter. In most cases, many creditors will have their own departments who are able to investigate the reason for the claim.
Ultimately, there are several reasons you could believe that a late payment on your credit report is a mistake, such as:
- a payment was made but did not process in the creditor’s system – for instance, an issue of communication between your bank and the creditor
- a fraudulent account was opened in your name
- a forgotten account was not paid
- your creditor was unable to reach you in regards to your debt due to incorrect information on file
- your bill was paid on time, but accidentally reported as late
- the report is more than seven years old and still reflecting on your report
Once you have noticed the late payment on your report, you should reach out to the creditor directly. If there truly is a mistake or an account has been opened in your name but not by you, you may reach out to the creditor directly to file a dispute. Alternatively, you can reach out directly to the credit bureau who issues the credit report to file a dispute. However, in most cases, it will be more efficient to reach out directly to your creditor for a resolution.
How Do I File A Dispute?
If you feel that the late payment reporting is a mistake, you should first reach out to your creditor to verify. Furthermore, you should check bank statements and any statements sent from the creditor to determine if the report is a mistake. Once you have reached out to your creditor, they typically have 30 days to review the account and determine if the late payment report was a mistake or not.
Depending on their judgment, if the late payment is determined to be a mistake, the creditor must reach out to all bureaus it reported to and have them reverse the report and update the mistake. If they determine the late payment is not a mistake, however, there will be no change to your credit report. It is also important to note that any updates to your credit report will not negatively impact your overall credit score as someone checking your credit would.
Alternatively, you can file a dispute with the credit bureau the report shows on. In this case, the bureau will reach out to the creditor to determine the issue. Typically, the credit bureau has 30 days to investigate the report and follow up with you, as well. If they determine that the reporting is a mistake or that an account is fraudulent, they will update the report accordingly without negative impact on your credit score.
What If The Late Payment Isn’t A Mistake?
There are times where the report will not be a mistake – for instance, possibly you forgot you were carrying a small balance on a credit card and thought you paid it off. Or maybe there was an issue processing a payment and you were unaware that it was returned. Either way, there are still a variety of ways that a credit report can be repaired when a late payment is reported.
Typically speaking, however, creditors are required to accurately report all payments to your credit report. So while in some cases, adjustments can be made, typically speaking creditors are not going to be willing to update your credit report if the late payment is correct and accurately reported.
The first and, typically, the best way to resolve a late payment report on your credit report is to ensure that you bring your account current as soon as possible. While this does not eliminate the late payment from your report, it does allow your account to report as presently current. This is a great first step in attempting to repair a late payment report on your credit report.
Other methods that are frequently recommended and discussed are outlined below:
The “Goodwill” Letter
One method that is often recommended by people – but important to note is not guaranteed to work – is to write a “goodwill” letter to your creditor, explaining why you were unable to make your payments. As previously mentioned, creditors are legally obligated to correctly and fairly report all late payments, so they are not required to reverse the reporting of late payments. However, in some cases, it has been shown to work and many will suggest it as an option.
Pay-To-Delete
Typically, this is a method that is offered by debt collectors. The idea behind this method is that, if you pay your account off, they will delete the account in collections from your credit report. However, it is important to note that in many cases, this is not actually how this particular method of late payment removal works.
Instead, in many cases, the debt collectors will have the paid-in-full collections account removed from your credit report, but not the late payments. Therefore, many professionals will suggest that this is not a good idea. Paid in full collections accounts are often able to assist in boosting your credit, as it shows debt has been paid off, even if it was an old debt. Therefore, while this method does expect as a possibility, many will not suggest it as a solution to late payment reporting.
How Does A Late Payment Affect My Credit Score?
Ultimately, there are a variety of ways a late payment can affect your credit score, depending on where your credit stood prior to the late payment being processed on your report. For instance, if you had a previous credit score of 650, you may only see a 10 point drop if it is one of several accounts reflecting on your report. However, if you have only two accounts on your credit report, and one of them is reporting late, you may see your score drop significantly from this.
It depends, for the most part, on your credit history. While one late payment may not ruin your credit score, multiple missed payments can significantly damage it over time.
How Long Does A Late Payment Stay On My Credit Report?
In most cases, late payments will follow typical credit reporting rules. Therefore, unless otherwise specified by your creditor through a payment arrangement, an account will stay past due, and continue to report that way, until it is no longer past due. Furthermore, the report of a late or missed payment will stay on your account for 7 years. If you review your credit report and see that you have negative remarks on your account that are more than seven years old, it is important to reach out to the creditor or the credit bureau to file a dispute, as all negative remarks are to fall off of credit reports after seven years.
Can I Get Professional Help With These Issues?
Understanding your credit report, late payment reporting, and responsible debt management can seem overwhelming, at first – especially if you are not well educated on how credit works. However, there are several agencies that are able to help you resolve past debt and increase your overall credit score over time. These professionals have a background in credit and understand credit reporting, and will work with you to help improve your overall score and dispute old reports.
Selecting an agency who fits your needs can also seem complicated – especially as with a simple google search, you may be able to find hundreds of different credit repair companies. It can be hard to determine which companies are trustworthy, and which are scams. Furthermore, it can be hard to determine, initially, which company will suit your credit repair needs and help you repair your credit over time.
Ultimately, however, some credit repair agencies have done an extensive research to determine the most reliable credit repair companies to assist you with your credit repair needs.
Based on their research, three primary credit repair services have been called out as the most effective and reliable. The top three, as reported by these agencies, are:
- Sky Blue Credit Repair: this company will review your credit report and resolve any errors found. Furthermore, they provide education to clients on credit matters and ensure understanding. Additionally, they are known for repairing 15 credit report items every 30 days, making them the fastest credit report repair service.
- Lexington Law: This company is one of the most experienced available, and has a reputation for having removed over 7 million negative remarks on credit reports, making them a highly reputable company.
- CreditRepair.com: they have a reputation for having removed at least 1.5 million negative remarks on credit reports. Furthermore, they provide 24/7 credit monitoring services and an intuitive user dashboard to make personal credit monitoring and navigation simple and user-friendly.
While these are not the only professional credit repair companies available, many professionals agree that the tenure and reputation of these companies make them stand out far above the others.
