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Guide to Removing Late Payment from Your Credit Report

You can rebuild your credit by making timely payment and removing late payments from your credit reports. Credit scores determine show if you’ve make timely payment or not, late payment brings your credit score down. A late payment stays on your credit report for seven years, this will hinder your ability to get a loan and also increase the interest rate you get.

Late payment fees may add up to 5% if the payment is after the grace period of 10 to 20 days. Also, an interest rate of 18% or 1.5% monthly is often found in most contracts. A late payment reflects on your credit reports when the lender reports that you paid late. This can happen in one of two ways.

  • It is either you paid late and the lender’s report is genuine
  • Or you never paid late and it was an error from the lender’s part.

In the case where the lender’s report is correct, it is quite a hassle to get the payment removed from your reports, though it is not an impossible task. If it was an error from the lender, it is quite an easy task to get it fixed. File a dispute that your report contains an error and request that the last payment is removed.

Factors Affecting Late Payment

The impact of late payment on your credit score depends on several factors, including if your lender reported your late payment to credit bureaus or not. Some of the factors affecting late payment include:

  • How Late

If your payment is less than 30 days late, it might not appear on your credit report. Late payment is generally categorized by 30, 60, 90 days and so on. Paying a few days late might not affect your credit, though you might be required to pay penalties to your lender. Also, you are at risk of having your account closed.

  • How Often

One or two late payments will certainly dent your credit score, though the damage is restricted if you start making timely payment. If on the norm, you are always late with your payment or you have late payments on several loans, the impact on your credit will be greater.

  • How Recent

A late payment impact takes effect on your credit score within a month. Scores are established to project the future, and new details are vital for the scoring model. It is important to remove old late payments because any negative entry on your credit will lessen your scores. Just a single late payment can lessen a good credit score of 750 and above by over 100 points. Your lender may be willing to forgive your mistake and remove the late payment from your credit report.

How to remove late payments from your credit report

  • Review Your Credit Reports

A late payment is linked to your credit account. Always review your credit report regularly from the three main consumer credit bureaus – Equifax, Experian, and TransUnion. These bureaus can help you check if anything is wrong with your report, an error like mistakenly reported late payment. The credit bureau will indicate any error and also state how late the payment was.

  • Goodwill Adjustment

You can contact your lender to request for a goodwill adjustment, this is by writing a formal letter to your lender explaining why your payment was late. If you have any proof to support your claim, attach it to your letter. The more proof you have on your late payment, the high chances that your creditor will remove it from your report.

  • Remove Old Late Payment

If the late payment happened over seven years ago, it should be removed from your credit reports automatically. If your report shows any late payment that is over seven years old, it could be an error and you may want to dispute it. You can file a dispute with the credit bureau that provided the credit report. Or the lender that sent the details to the bureau.

  • Negotiate

If your complaint gets rejected, try negotiating with your lender. If your debt is still outstanding, you can agree to offset the whole balance at once. Or you could offer to sign up for auto-pay to ensure you pay on time. Ensure to get a copy of the agreement reached so you can always refer back to it.

If all of these fail, you may have to come in terms with the late payment staying on your credit report. Ensure you make timely payment afterward, improve your credit score using less than 30% of your available credit and maintain good credit accounts.

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