Can credit repair remove late payments – or are you stuck with this stain on your credit report for good? The answer may surprise you. Today, we’re going to cover everything you need to know about using credit repair companies to remove late payments on credit reports.
Bills can be a lot to deal with, especially for those dealing with financial hardship. Some people may not be able to handle their payments on time every month. Not handling payments on time can result in late payments on your credit report. These late payments can mean some bad news for your credit score. This becomes especially problematic if you have other tarnishes on your report – such as an eviction. However, your situation may not be as hopeless as you think. Let’s start by talking about credit scores and credit reports in general. Then – we’ll teach you how to remove a late payment from your credit report. Let’s dive in!
Understanding Your Credit Score & How Credit Reports Work
It is important to have a better understanding of your credit score when dealing with late payments. Your credit score is a number that reflects the information from your credit report. Lenders will use your credit score as a way to better understand you as a borrower. This helps them assess risks that they may face if you borrow money.
Credit bureaus (also known as credit reporting agencies) will collect and store information from creditors like lenders, credit card companies, rental companies, and more to build credit reports. A majority of people will have multiple credit reports. Creditors don’t have to report to every credit bureau which is why many people only consider the popular ones. There are three major credit bureaus which are Experian, Transunion, and Equifax.
Credit reports will contain a variety of information like your:
- Current Name
- Past Names (If Any)
- Current Address
- Past Addresses
- Birthday Information
- Social Security Number
- Contact Information
- Current Credit Account Information
- Past Credit Account Information
- Credit Limit
- Account Balance
- Relevant Payment History
- Liens
- Foreclosures
- Bankruptcies
- Overdue Payments
- Civil Suits
- Judgements
- Inquiries
These comprehensive credit reports have a lot of information! How the information on your credit report will impact your credit score varies by credit bureau. Credit bureaus have their own scoring models so this means that it will be different depending on where you go.
Understanding How Late Payments Affect Your Credit Score
Now that you have a better idea of what credit scores and credit reports are, let’s get a little bit more in-depth about late payments. Late payments are a part of your payment history which impacts 35% of your credit score. Late payments are defined as an amount of money that the borrower sends to the creditor after the due date and grace period has passed. These late payments are no laughing matter and can have consequences like:
- Fees
- Extra Interest
- Termination of the Account
- Showing Up on Your Credit Report
Lenders aren’t as strict as you may think. Generally payments that are less than 30 days late don’t show up on your credit report unless they happen a lot. Depending on the type of late payment, they can stay on your credit report for up to seven years. Their negative impact will decrease over time until they eventually fall off. They are usually categorized on a credit report depending on how late they are. Categories are generally 30 days, 60 days, 90 days, 120 days, and 150 days.
How Much Does a Late Payment Hurt Your Credit?
The amount of impact a late payment will have on your credit varies based on a bunch of factors. If you have a spotless payment history on your credit report but miss a payment that’s over 30 days past due then you could see a decrease by 100 points. Luckily, if you already have a lower score then the impact won’t be as severe but it will still be there.
How to Avoid Late Payments Affecting Credit Reports in the First Place
We know you came here to learn whether or not credit repair companies can remote late payments from your history. However, we believe an ounce of prevention is worth a pound of cure. While it may be too late to fix the issues you’re currently dealing with, there are ways that you can avoid a late payment in the future:
Select Your Due Dates
Lenders often provide flexibility when it comes to due dates. A majority of lenders offer the opportunity for consumers to pick when their due date is. For example, if your due date from your credit card issuer is normally on the 27th but you get paid the 1st, then you may want to reschedule it to be closer to your payday. This can help you avoid a late payment.
Set Up Alerts
Think of your alarm clock. Your alarm clock alerts you in the morning to wake up. You can set up alerts around when your bills are due. Making sure you are reminded to make payments can help you stay on track before they become late payments.
Use Automatic Payments
If you just forget to make the payments then it is important to set up automatic payments. These payments will be automatically withdrawn from your account to go towards the bill that you owe. You can keep track of your automatic payments by writing them down in a calendar so that you can just make sure the automatic payment was taken out of your account. Automatic payments can seriously help you reduce your late payments!
Pay the Bill Throughout the Month
Let’s say that your phone bill for the month is $100. Instead of paying a one time payment by the due date (which if missed can result in a late payment), you can pay the amount over the course of the month. If you get paid weekly then you could take $25 out of your paycheck every week to go towards your bill. By the time your due date arrives, your whole payment should be taken care of!
Will Making a Partial Payment Help You Avoid a Late Payment?
Sometimes something is better than nothing. However, not when it comes to your late payments getting reported to the credit bureaus. Partial payments will not help you avoid the late payment on your credit report. For example, if your minimum payment due by your credit card issuer is $50 but you can only make $35, the payment will still be considered late. If you can’t make the minimum payment then you should talk to your lender. They may be more understanding than you realize.
Can Credit Repair Companies Remove Late Payments?
It’s time to get into the main topic at hand today. Can credit repair remove late payments? Specifically, can credit repair companies remove late payments? Unfortunately, the answer isn’t as simple as you may hoped for.
Sometimes you may have so many late payments on your credit report that you feel like you can’t dispute them all. That is when you may benefit from using a credit repair company. These companies help consumers for a fee by reviewing their credit report and disputing any inaccuracies. A credit repair company can do everything that an individual can do. However, they advertise their services as a way to save time and effort for the consumer since they have the knowledge and experience to handle the dispute process of a late payment properly. So – can credit repair companies remove late payments from credit reports? Or, are they more known for overpromising and underdelivering?
It depends on a few factors. If the late payment is inaccurate or unverifiable then yes they can. However, if you have a legit, verifiable late payment on your credit report then they won’t be able to help too much. They don’t have superpowers and all they do is dispute late payments on your credit report. So – at a certain point, you may have to take matters into your own hand. Without further ado, let’s teach you how to remove a late payment from credit reports.
How to Remove Late Payments from Credit Reports
If you have a late payment on your credit report, then there may be ways to remove it! People that want to remove late payments on their report can try a:
- Goodwill Adjustment Letter
- Pay for Delete Letter
- File a Dispute
- Use a Credit Repair Company
- Just Wait
Goodwill Adjustment Letter
If you have a good credit history and good relationship with your creditor then you may be able to get a goodwill adjustment for the late payment. Even if you don’t have a great history and/or good relationship with your lender then you can still try to get a goodwill adjustment! You just may not get approved.
If you want to submit a goodwill adjustment letter you will need to write one that explains the late payment and asks for forgiveness. You can also reassure them that the late payment will not happen again and that you learned from your mistake. If they agree to the adjustment then they will update your credit file accordingly.
The worst they can say is no! If they do say yes make sure you have written confirmation of their adjustment. This will be supportive documentation that you can use if you don’t see the late payment removed from your credit report.
Pay for Delete Letter
You can also try sending a pay for delete letter. Within this letter you will want to offer debt repayment in exchange for the removal of the late payment from your credit report. You will want to outline what you are offering and what you expect in exchange. The creditor may not accept this but the worst they can say is no.
File a Dispute
If you have reason to believe that the late payment on your credit report is an error then you can file a dispute. Generally people submit disputes with one of the three major credit bureaus. You will want to begin the process by writing a letter that contains proof of the inaccuracy and why you believe it’s wrong.
Once the credit bureau receives the dispute letter they will need to respond within 30 days, but if there is any follow up within that timeframe then they will have an extra 15 days to respond.
If they find your dispute incorrect then the late payment will stay on your credit report. If your dispute is accurate, then you will see the late payment removed from your credit report!
The reason that credit bureaus will remove the inaccurate negative mark is due to the protections from the Fair Credit Reporting Act (FCRA). This act ensures that credit bureaus only report accurate information.
Just Wait 7 Years
If all else fails, then you are left having to just wait. The late payment will decrease in impact over time until it eventually falls off after 7 years. If you tried sending letters and disputing the claim with no luck then waiting will be your next best bet.
Can Credit Repair Remove Late Payments? Wrapping Things Up
A late payment can be stressful to deal with. While no one wants to deal with a late payment in the first place, your situation may not be as hopeless as it feels. Late payments are a part of your payment history that impact 35% of your credit score (based on the FICO scoring model).
If you miss a payment, that late payment may be reported on your credit history which will in turn impact your credit score. How much the late payment will impact your credit score varies on factors like how late the payment is, how many late payments are on your credit report, etc.
If you do have a late payment on your credit report, you aren’t necessarily out of luck. There are some strategies that you can try that may be able to remove the late payment from your account like writing a specific letter or disputing the mark. The worst case scenario is you just have to wait until the late payment falls off after 7 years. No one likes dealing with late payments. However, you may be able to bounce back from one faster than you realize!
So – can credit repair companies remove late payments? By now, you realize that the answer isn’t one-size-fits-all. We’ve provided you with accurate information on how to navigate credit scoring models and remove lay payments from your credit history. At this point, you should feel confident in taking your next steps to show a positive payment history on your credit accounts!
Want to learn more about improving your standing with major consumer credit bureaus? Our articles on credit repair vs paying off debt, credit repair for veterans, and credit repair for low income families are all great resources. We even have a similar article to this one – can credit repair help with student loans? We’re here to help you navigate your financial future and live the life you’ve always dreamt of – so explore our blog!
