Making timely payments is one of the most important practices for maintaining strong credit. Missing a single payment can have an immediate reflection on your credit score, so you should do your best to always pay on time.
But nothing in life is perfect, and even the most responsible consumers miss a due date every now and then. Do their credit scores plummet?
You can learn more about the negative effect missing payments have on your credit and how to get late payments off your credit report in the guide below.
How Do Late Payments Affect Your Credit Score?
Consumers who understand the importance of keeping good credit know how big an impact late payments can have on their credit scores. The payment history is the single most essential aspect of credit, accounting for 35% of your overall credit score.
And while one late payment by itself won’t disqualify you from getting a new credit card, it can cause serious damage to your credit score, particularly if you otherwise have excellent credit.
Data suggests that consumers with very good scores have experienced 60 to 100-point drops for missing a single payment. The point reduction for consumers with lower-than-average credit scores isn’t as impactful, but is still fairly significant ranging from 25 to 50 points.
The worst part is late payments remain on credit reports for seven years before they expire.
Can You Get Late Payments Removed From Your Credit Report?
Credit bureaus are legally bound to report accurate information. If you were, in fact, late with a payment, and the credit bureau reported it, your options for removal are quite limited.
However, if you missed the due date by just a few days, there are chances that you can salvage the situation. Most creditors don’t report late payments to the credit bureaus for the first 30 days after the due date. If you manage to settle your debt within this 30-day window, you will likely avoid getting reported.
On the other hand, if the late payment is already on your credit report, you can try one of the two following options.
A Goodwill Letter
If you generally are a responsible client that always pays their bills on time, it’s worth asking your creditor for late payment forgiveness through a goodwill letter. Even though the law requires creditors to always report accurate information, cutting you some slack shouldn’t be too much trouble for them.
While there aren’t too many acceptable reasons for late payments on a credit report to be removed, and most of the time, they aren’t, it doesn’t hurt to try. The worst thing that can happen to you is the creditor will refuse your plea, and you will be back to square one.
Sending a goodwill letter is by no means a foolproof way to get late payments removed from a credit report, but a number of consumers online claim that they were able to convince their creditor to help them out.
According to them, the key to a successful goodwill letter is acknowledging your mistake and apologizing, instead of making up excuses and explaining why you believe you deserve sympathy.
If your creditor refuses to remove the missed payment from your credit report, there is one more solution you can try.
Pay for Delete
Instead of asking for help, you can try to negotiate with your creditor. In some cases, consumers make agreements with debt collectors in which they make a payment for the deletion of the negative items on their credit reports.
Please note that the pay-for-delete method is generally used by consumers who have piled up several late payments, and are trying to remove collections from their credit reports.
If your situation is not as dire and you are not trying to remove multiple late payments from your credit report, you should avoid making a pay-for-delete agreement and just wait out the seven years. Over time, the negative effect of your late payment will fade, and you will be able to repair your credit by practicing good credit habits.
As you can see, there is not much you can do to remove a valid late payment from a credit report. But if you run into a late payment you believe should not be on your credit report, you can dispute it with the credit bureau and rightfully ask for its removal.
Removing Incorrect Late Payments From Credit Report
According to the Fair Credit Reporting Act, most negative items on a credit report, including late payments, can be reported for up to seven years from the original due date. If your credit report contains a late payment outside the legally allowed reporting period, you should file a dispute with the credit bureau that created it and ask for it to be removed.
Moreover, credit bureaus are not immune from making mistakes, and consumers sometimes find errors in their reports. If you believe that the late payment in your credit report was added there by error, you have grounds to dispute the inaccurate information and ask for its removal.
How to Dispute a Late Payment on a Credit Report
Disputing late payments on a credit report is a straightforward process you can do by yourself, over the phone, by mail, or by email. It’s best to avoid calling the credit bureaus when disputing credit reports because it can be hard to provide evidence over the phone, and mail and email correspondence leave proof of the conversation in writing.
When removing late payments from a credit report through a dispute, you should collect bank statements, payment confirmation numbers, and other documentation that can prove the information is incorrect. Also, make a copy of the credit report and highlight the erroneous late payment so that the bureau understands what you are talking about.
Finally, write a letter or an email stating that you dispute the highlighted late payment and explain why you believe it is incorrect. Include the documentation that backs up your claims in the letter or email and send it to the credit bureau. The bureau has between 30 and 45 days to investigate your dispute and make corrections.
Getting a late payment removed from a credit report through a dispute is only a feasible solution when the late payment is reported incorrectly. Of course, you can try to dispute a valid late payment, but the bureau will reject your dispute and won’t remove it from the report.
How Long Does It Take To Repair Credit After Late Payments?
The negative effect of a late payment will fade over time, but how long exactly it will hurt your credit depends on several factors.
If you only missed one payment but have paid it since, by adding positive and avoiding negative items, you can balance things out reasonably quickly.
But if you missed multiple payments, got your account in delinquent status, and, worst case scenario, got your debt written off, it will take a few years for your credit to heal fully. Charge-offs have a devastating and long-lasting impact on your credit, and removing charge-offs from credit reports can be very difficult.
Do your best to avoid such a scenario and pay your bills as soon as you get the chance so you can start repairing your credit as soon as possible.
The Bottom Line
There is not a lot that you can do to remove late payments from your credit report when you really missed paying on time.
If you are less than 30 days late, make the payment before your creditor reports it to the credit bureaus. If the 30-day window has passed, the only thing you can do is send a goodwill letter to your creditor and hope that they will help you out and ask the credit bureaus to remove it.
Disputing late payments on a credit report is only a viable method for removal when the reported late payment is erroneous, in which case you should definitely dispute it.
