If you fail to pay your debts on time, the lender will penalize you by charging a “late payment” fee and this will also reflect on your credit report. As the term suggests, a late payment is reported if you’re late in paying your account for 30 days or more.
If you are trying to improve your credit score, removing late payments on your credit report is one method that you can try. But is it actually possible to remove late payments from your record? In this article, we will show you the steps on how to delete late payments from your credit report, whether they are accurate or inaccurately reported.
Can Late Payments be Removed From my Credit Report?
A late payment on your credit report will negatively impact your credit score by around 5 points to over 100 points. The exact number of points deducted from your credit score will depend on your current credit standing and how late you were in issuing the payment.
However, what is more upsetting for a lot of people is that a late payment record stays on your credit report for seven years even if you already paid the debt in full.
Perhaps you are wondering whether it is even possible to remove late payments from your credit report. The answer is YES, it is possible to have late payments removed from your credit report. The process, however, is not that easy. Just because you want to improve your credit score, you cannot just request credit bureaus to remove these entries without a valid reason or proof.
There are two possible circumstances when a late payment can be removed from your credit report.
1. The Late Payment Record is Inaccurate
If the late payment was reported incorrectly, the credit bureau is obligated to delete the record from your credit report. You have to file a dispute with the credit bureau and show proof of why the late payment is inaccurate.
2. The Lender Agrees to Remove the Record Out of Goodwill or After a Payment Agreement
In some instances, the lender will agree to remove the record of late payment even if the late payment record was reported accurately. You will either have to send a goodwill letter to request the removal or negotiate a payment deal to have the late payment record deleted.
Steps on How to Remove an Inaccurate Late Payment From Credit Report
One of the easiest ways to have a late payment removed from your credit report is if it was inaccurately reported in the first place. You just have to file a dispute with the credit bureaus and show them that the late payment record is wrong and after investigation, they can delete this late payment from your report.
Below are the steps you need to follow to remove an incorrect late payment from your credit report.
Step 1: Request a Free Copy of Your Credit Report
The very first step that you need to take is to request a copy of your credit report. You can request a copy of your credit report online by going to AnnualCreditReport.com. Requesting a credit report from this website will not require you to pay anything as you are entitled to one free copy per year from the three major credit bureaus- Experian, Equifax, and Transunion.
Step 2: Check Your Credit Report for Inaccuracies Regarding the Late Payment Record
Once you receive a copy of your credit reports, carefully check the items one by one in case there are mistakes. Spot the late payment record that you want to have removed and cross-check it with your personal records like bank statements or receipt of payments.
Not a lot of people realize that it is very common to have mistakes recorded on credit reports. In fact, a Federal Trade Commission study found that 1 in 5 people have mistakes on their credit reports. Aside from the date of the payment, other mistakes can also include your name, the amount reported, or whether the debt is even yours.
Step 3: Prepare Proof That the Late Payment is Inaccurate
If you believe that the late payment record is inaccurate, prepare evidence to support your claim. Having this proof will help you in the dispute process. For example, if you have proof that you paid the debt on time, then provide this when filing your dispute.
Step 4: File a Dispute With the Credit Bureaus
You have to file a dispute with the credit bureau where the late payment record appears. If the late payment appears only in the Experian credit report, only file a dispute with Experian. You do not need to file it to the other two credit bureaus. However, if the late payment record appears on two or three credit reports, you have to file with each company that recorded the late payment.
You can use the sample letter below from the Federal Trade Commission to dispute the error on your credit report. Make sure to indicate the details of the late payment and request to have it removed.
Sample letter to dispute late payment errors on your credit report
You can file a dispute online or by sending a physical mail to the three major credit bureaus:
Equifax Information Services LLC
P.O. Box 740256
Atlanta, GA 30374-0256
Equifax Online Dispute Page
Experian Dispute Department
P.O. Box 4500
Allen, TX 75013
Experian Online Dispute Page
TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA 19016-2000
Transunion Online Dispute Page
Step 5: Check Your Credit Report Again if the Entry has Been Removed
The dispute process usually takes 30 to 45 days. The credit bureaus will have to investigate if your dispute is valid. If they find that your complaint is correct, then they will delete the late payment entry.
The removal, however, may not be instant. Even if you already receive a positive response that they will remove the late payment, it will typically take about a month for the removal to be reflected on your credit report. After that period has passed, you can request another copy of your credit report and check whether the late payment was deleted.
On the other hand, if the credit bureau was able to verify that the late payment entry is accurate, this will remain in your credit report for seven years.
Can I Remove an Accurately Reported Late Payment From My Credit Report?
What if you really paid late? You might be wondering if there is a way to attain credit score recovery after a late payment. The answer is YES. While it is very rare to have a late payment removed from your credit report, there are instances wherein a lender or creditor may agree to remove it from your credit report.
Below are some options that you can explore:
Option 1: Write a Goodwill Letter
Unlike a dispute letter wherein you are contesting or complaining about the late payment entry on your credit report, a “goodwill letter” is a letter of request to the creditor where you admit that the late payment was indeed accurate but you are requesting that they still remove the entry out of goodwill.
A goodwill letter will not work for everyone. If you have a long history of late payments and delinquency, a creditor will most likely not approve of your request. However, there are some reasons when a creditor may approve of your request such as:
- You have a good credit standing and the late payment was a one-time mistake.
- The late payment was due to unavoidable/extenuating circumstances such as an accident, illness, death of a loved one, divorce, etc.
- The late payment was due to an unforeseen financial hardship.
- The late payment was due to a technical glitch.
If you can prove that the late payment occurred due to these reasons, the creditor may be willing to forgive you and delete the late payment entry.
Option 2: Negotiate a “Pay for Delete” Deal
If you do not have a valid reason why you paid late or your credit history is not that spotless, one way to sway the creditor to remove the late payment entry is to negotiate a “Pay for delete” deal. In this case, you will agree with the creditor that you will pay the full debt amount in exchange for the removal of the late payment entry.
This can be helpful if you are trying to improve your credit score because you are preparing for a major purchase like buying a car or getting a mortgage. If the amount you will pay the creditor is much less than what you will potentially save on interest fees due to a higher credit score, you may consider this option.
Option 3: Consult a Credit Repair Company
If all else fails, you could consult with a professional credit repair company to see whether they can help you remove these late payments. A professional credit repair company may also be able to help you improve your credit score in other ways aside from helping you remove the late payment entries. In choosing a credit repair company, you have to carefully check whether they are reputable companies as you do not want to be scammed or lose your money without any positive result.
Sample Goodwill Letter to Delete a Late Payment From Credit Report
Below is a template that you can use when sending a goodwill letter. You can modify this letter to suit your particular situation.
To whom it may concern,
I am (insert your name) and I have been a customer of your company for (indicate the length of time).
I am writing this letter to address an item in my credit report from your company. (Describe the late entry on your credit report including the account itself whether it is a credit card payment, mortgage, student loan, car loan, etc.).
I would like to request if you could forgive this oversight and remove the negative late payment entry on my credit report. I have attached copies of relevant documents with this letter so you can further review my request.
As you can see from my records, I have remitted timely payments every month, however, in this specific instance, I recognize that there was a failure on my part to pay on time. This was caused by (Explain the reason why you were not able to pay on time. Be as detailed and emotional as possible.)
While this was an unavoidable situation, I accept that I am ultimately responsible for my financial duties and I have taken steps to ensure that this will not happen again by being more diligent in managing my payments even if faced with such difficult circumstances.
At the moment, I am currently working to improve my credit score because (Indicate the reason like getting a mortgage or buying a car) and this negative late payment entry is, unfortunately, making it a challenging process for me. Having this late payment entry removed from my credit report will greatly help me and my family in our financial endeavors.
I am very hopeful that you will consider my request and I would like to thank you in advance for your consideration to help out a loyal customer.
Sincerely,
(Insert your name)
Avoid Late Payments From Being Recorded on Your Credit Report
Getting a late payment record on your credit report can cause a negative impact on your credit score and cost you money. Plus, having these entries removed is not an easy process. To avoid late payments, it’s best to diligently manage your payments every month by signing up for automatic payment features or downloading money management apps that will alert you if payments are due.
Aidan has been writing about personal finance for over 6 years. Prior to this, he worked as a Corporate Finance Analyst where he specialized in Due Diligence, Company Valuations and more. He is a CFA charterholder.
