Summary: In this article we will explain in detail how to delete a late payment from your credit report.
Late Payments can have a significant negative impact on your credit score. In fact, a single late payment on your credit report can cause a drop of more than 100 points.
A low credit rating can result in you having to pay higher interest on loans, higher premiums on insurance, and not being approved for mortgages, among other things.
Fortunately, there are five main methods that you can use to remove late payments from your credit report. We’ll go through each of these processes in detail. So, let’s begin.
- When Is a Late Payment Reported?
- How a Late Payment Affects Your Credit Score
- How to Remove Late Payments From Credit Report
- How Long Does A Late Payment Stay On Your Credit Report?
- How Much Will My Credit Score Increase if Late Payments Are Removed?
- Final Thoughts
When Is a Late Payment Reported?
Generally, you can expect a late payment to be reported on your credit report once it’s been 30 days late. Of course, the longer the account (usually a credit card) is late, the more of a negative impact it will have on your credit score.
Here is an example of what a late payment will look like on your credit report:
How a Late Payment Affects Your Credit Score
Before we jump into the steps you can take in order to remove late payments from your credit report, it’s important to understand how late payments negatively affect your credit score.
The answer depends on your credit score prior to when the late payment occurred. As a general rule, the higher your credit score, the farther it will fall.
According to the credit bureau Experian, a single late payment can drop a 780 credit score by 90-110 points, and a 680 credit score by 40-60 points.
Of course, more than one late payment will have a greater affect on your credit.
How to Remove Late Payments From Credit Report
As we’ve just outlined, late payments can have a big impact on your overall credit. Your score will likely drop as a result, and it will affect your ability to access credit in the future.
Therefore, it’s important to do everything in your power to remove late payments as quickly as possible. Let’s get into how you can accomplish late payment removal.
1. Ask for a Goodwill Adjustment
This method is perhaps the simplest one that you can use, although its success depends on your previous payment history with the creditor.
All you have to do is write a “goodwill letter” in which you explain why you were unable to make your payments on time, and ask that the creditor give you a “goodwill adjustment“. In other words, ask if they will remove the late payment from your credit report out of goodwill.
This method obviously works best when your overall payment history is positive with the creditor (usually credit card companies).
Here are a few examples you can use in your goodwill letter as the reason why you were late.
Make sure to address the creditor with suitable respect, using language that is formal and appropriate. Freely acknowledge that you are the one in the wrong, as you have failed to make a payment when it was due.
It’s not a good idea to argue with the creditor about the unfairness of any aspect of the payment in your goodwill letter. You agreed to make the payment, and you failed to do so.
It’s as simple as that. So, accept your mistake and don’t protest too much.
You need to explain to the creditor why you were unable to make the payment on time. Try to make your case honestly and convincingly.
Once you’ve accepted your mistake, explained the reason for it, then you can humbly ask the credit if they could possibly forgive the late payment.
Creditors will sometimes decide to forgive your late payment, and your credit report is then adjusted to take into account the removal of a late payment.
Sometimes creditors don’t forgive late payments, so your goodwill letter might not have any effect at all. Nonetheless, it’s worth a try.
2. Write a Pay For Delete Letter
If you have a history of making late payments, then your goodwill letter is unlikely to have any effect on a creditor.
An alternative that you can try is to write a letter to your creditor and ask that they remove the late payment in exchange for a certain sum of money.
So, in your letter, you tell the creditor that you are willing to make the full payment, and in return, you would like them to remove the report of the late payment from their side.
You should also ask them to send their response to you by a certain date.
If the creditor accepts your proposal, then you will have the late payment removed from your credit report by paying the original payment that you were late on.
This method is more likely to work than writing a Goodwill Adjustment letter, as the credit will be getting their money back.
3. Negotiate For Removal By Signing Up For Auto Pay
Like the previous two methods, this method also involves writing a letter to your creditor. You ask the creditor to remove the report of the late payment, and in return, you agree to sign up for automatic payments.
In automatic payments, a certain amount of money is transferred from your account to the creditors after a set time period.
The amount of money and the time period between each payment needs to be decided by negotiating with the creditor.
This method can only work if you have sufficient funds in your bank account. If you have the sum required, then you can become eligible for automatic payments.
Sometimes creditors agree to remove the late payment if you sign up for automatic payments. The benefit to using automatic payments is that you don’t have to pay back the entire late payment as one big amount.
You can make the payment in stages, which is good for your cash flow.
4. Dispute The Late Payment As Inaccurate
Sometimes, there can be errors in your credit reports. If you think that an incorrect late payment has been reported on your credit report, then you can request your credit report from a credit bureau and check for yourself.
Alternatively, you can hire a credit repair company to contact all the credit bureaus, get your credit reports, and look them over for any errors.
There are a few things that you should check in a late payment entry on your credit reports.
If any of these are wrong, then you can write a dispute letter to the credit bureaus and ask for the late payment to be removed from your report.
Potentially inaccurate details to check on your credit reports:
- Date Reported
- Account Name
- Account Number
The credit bureaus then have to provide verification about the details of the late payments on your credit reports.
If they can’t verify the missed payment details, then the late payment has to be removed from your credit reports.
Credit Bureaus Dispute Mailing Addresses
|P.O. Box 2000 Chester, PA 19016||P.O. Box 740256 Atlanta, GA 30374||P.O. Box 9701 Allen, TX 75013|
5. Hire a Credit Repair Professional
Lastly, you can hire a credit repair company to do all this difficult work for you.
Hiring a credit repair company can save you lots of time and effort, and as these companies are professional credit experts, they are much more likely to get results.
Bonus: Late Payment Removal Letter Due to Covid-19
If you received a late payment on your credit report due to Covid-19, write a goodwill letter to the creditor and mention that you were experiencing issues do to Covid, and this might do the trick. It depends on your individual circumstances, but I have seen this work.
How Long Does A Late Payment Stay On Your Credit Report?
A late payment can stay on your credit history for up to seven years. This means that for seven years, the late payment is going to lower your credit score.
So, for up to seven years, any loans that you take out will be at much higher interest rates. You will have a lesser chance of being granted a mortgage or a car lease.
If you’re planning to take out insurance, then substantially higher premiums will be charged. Therefore, it’s a good idea to get late payments removed from your credit history as soon as possible.
How Much Will My Credit Score Increase if Late Payments Are Removed?
Depending on your current credit scores, you can increase your credit scores up to 100 points when you remove late payments.
In general, the most important late payments to get removed are the most recent.
After going through this article, you should have a pretty good idea of how to remove late payments from your credit report.
Again, the most important thing is that you move quickly to remove all late payments reported before it starts to affect other credit accounts.