Three Ways to Get Late Payments Removed From Your Credit Report

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Falling behind with payments is extremely damaging to your personal rating in both FICO and VantageScore models. The score is guaranteed to fall, so getting affordable rates or even approval from lenders will become difficult. What’s more, this indicator is a universal metric of financial health considered by insurance companies, landlords, and even recruiters. If late payments appear on your report, your options are limited.

The easiest way to erase this information is to hire one of the best credit repair agencies — check the latest rating for additional info about these services. If the entries are correct, there is no legit way to scrub them off the records.

Prolonged Effects

Late payments are classified as derogatory marks, items that reflect the failure to meet personal obligations. Like most entries of this kind, they expire naturally in seven years. Missed payments are documented in 30 days unless they are related to medical expenses — check this guide on how to get medical collections off credit report in 2021. So, what can you do if the damage has been done?

Method 1. Goodwill Letter

This method is simple, but the result is not guaranteed, as lending institutions are obliged to report accurate information to the bureaus. Still, as it will not cost you anything, it is worth trying. You can easily find templates of such letters online. The goal is to explain why you fell behind on payments, and that you are determined to meet your obligations in the future. If the letter is convincing, the lender may agree to exclude the information from the data it shares with the bureaus.

If you are just a few days late, a better option is to call the lender immediately after making the payment. Financial institutions do not report payments as missed until they are 30 days overdue. If you act fast, they may agree to let you off with caution. This may only work a couple of times at most.

Method 2. File a Dispute

Under The Fair Credit Reporting Act, every citizen of the United States is entitled to accurate records. Bureaus are obliged to remove unverifiable and unsubstantiated details, which allows you to dispute any items on your report. According to recent studies, around one-third of Americans have one or more imperfections in their records.

Thus, if you notice false or erroneous data concerning late payments, hire a restoration company or file a dispute yourself. Professional services accelerate the result, as this multi-layered process is quite time-consuming. It includes four main stages:

1.   Aggregation of Data

Every lender may share data with one, two, or three bureaus, so you have to collect all three reports to get the full picture. On www.annualcreditreport.com, you can get a free copy of your current records from Equifax, Experian, and TransUnion. Until April 20, 2022, you can do it weekly.

2.   Analysis of Reports

After obtaining the histories, scrutinize them going line by line. Pay attention to minor details like spelling and amounts. Any incorrect information can be disputed under the FCRA.

3.   Preparation of Evidence

While bureaus investigate every claim thoroughly, you still need to provide supporting evidence. Bank statements and any official documents from your lender may serve as proof.

4.   Initiation of Disputes

Finally, based on the evidence, you can create a convincing dispute letter. No single layout exists, and you can use this free example from the CFPB site. If you hire restoration experts, they will do everything on your behalf, from data collection to correspondence.

In 30 or 45 days, the bureau will get back to you with a formal reply. If the changes are accepted and the derogatory information vanishes, you will get an updated copy of your report by mail. Note that if the late payments you want to challenge are found on two or more reports, you will have to open separate disputes.

Method 3. Pay-for-Delete Letter

If you are searching for ways to get rid of collections, you are bound to find guides describing so-called “pay for delete” letters. The idea is that the collection agency may agree to remove the account from the data it shares if you pay it off. On the downside, this is a gray legal area, as collectors are also obliged to delete only false information. This method may only work for paid collections, but it will not remove the original account and overdue payments associated with it.

When Are Late Payments Reported?

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Lenders follow strict reporting cycles, which gives you an opportunity to fix a missed payment before it appears on your report. The information is passed to the bureaus 30 days after the due date. Thus, if you pay earlier, the creditor may not report it. After 30 days, there is no opportunity to delete this information. However, unpaid medical bills are different. The healthcare provider reports this information if your insurer fails to pay up for six months in a row.

How Do Late Payments Impact Personal Scores?

Once your slip-up is reported, the effect is immediate. The score is a dynamic metric calculated based on your history, so it changes all the time as new information appears. Failure to pay on time is the most damaging factor for both FICO and VantageScore. It defines 35% and 40% of the assessments, respectively.

Being 30 days late can deprive you of as many as 100 points. This may prevent you from getting the best conditions on loans, rent, and insurance, or even getting approved. Even one mistake will drag the total down. Do not rely on your memory — use reminders or set up automatic transfers to avoid missing the next due date. This misstep has prolonged and far-reaching implications.

The Bottom Line

Even one late payment is guaranteed to affect your score. If this information is false, you may challenge it through the formal dispute procedure. If it is accurate, the only way to mitigate the effects is by generating positive history.

Keeping up with the payment schedule is crucial for your financial future. If the damage has been done, make sure it does not happen again. Work with your personal budget and learn about ways to rebuild the score, such as lowering the utilization rate.

 

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About the Author: Brian Novak