Credit Reports: Removing Late Payments for a Mortgage

Late payments can hurt your credit score and ability to get approved for loans or credit cards. If you have one or more late payments on your credit report, you may be wondering if you can get them removed. The answer is that it depends.

In this article, we will explain what a late payment is, how it affects your credit score, how long it stays on your credit report, and how you can get it removed. We will also answer frequently asked questions about late payments and credit reports.

By the end of this article, you will have a better understanding of how late payments work and what you can do to improve your credit situation. Read on to find out more.

What is a Late Payment?

A late payment is when you fail to pay a bill by its due date. Depending on the type of account and the lender, a late payment may be reported to the credit bureaus (TransUnion, Equifax, and Experian) after 30, 60, 90, or 120 days past due. The later you pay, the more damage it can do to your credit score.

A late payment is one of the most common negative items on a credit report. According to FICO, the company that calculates credit scores, payment history accounts for 35% of your credit score. This means paying your bills on time is the most critical factor in maintaining a good credit score.

How Does a Late Payment Affect Your Credit Score?

A late payment can lower your credit score by several points, depending on how late it was, how much you owed, how recent it was, and how many other late payments you have. The more severe and frequent your late payments are, the more they will hurt your credit score.

A late payment can also affect your credit score for a long time. According to FICO, a late payment can stay on your credit report for up to seven years from the reported date. However, the impact of a late payment on your credit score will decrease over time, especially if you make on-time payments on your other accounts.

How Can You Get a Late Payment Removed From Your Credit Report?

There are three main ways to get a late payment removed from your credit report:

Dispute the late payment with the credit bureau. If you believe that the late payment was reported in error, you can file a dispute with the credit bureau that shows the late payment on your credit report. You must provide proof that you paid on time, such as a bank statement, a receipt, or a confirmation email. The credit bureau will investigate your claim and remove the late payment if they find it inaccurate or unverifiable.
Dispute the late payment with the creditor. If you have a good relationship with the creditor who reported the late payment, you can try to dispute the late payment with them directly. You can call them, write a letter, or use their online portal to explain your situation and ask them to remove the late payment as a goodwill gesture. The creditor may agree to remove the late payment if you have a history of paying on time if you made the payment soon after the due date, or if you had a valid reason for paying late, such as a medical emergency or a natural disaster.
Negotiate with the creditor. If the late payment was accurate and the creditor is not willing to remove it as a goodwill gesture, you can try to negotiate with them to remove the late payment in exchange for something else. For example, you can offer to pay off the balance in full, enroll in automatic payments, or settle the account for less than what you owe. The creditor may be willing to remove the late payment if you show them you are serious about resolving the debt and improving your credit.

How Long Does It Take to Get a Late Payment Removed From Your Credit Report?

The time it takes to get a late payment removed from your credit report depends on the method you use and the response of the credit bureau or the creditor. Generally, it can take a few days to a few months to get a late payment removed from your credit report.

If you file a dispute with the credit bureau, they have 30 days to investigate your claim and update your credit report. If you file a dispute with the creditor, they may take longer to respond and process your request. If you negotiate with the creditor, they may remove the late payment as soon as you fulfill your part of the agreement.

How Can You Avoid Late Payments in the Future?

The best way to avoid late payments in the future is to pay your bills on time every month. Here are some tips to help you do that:

Set up reminders. You can use a calendar, an app, or a notification system to remind you of your due dates and payment amounts. You can also sign up for alerts from your creditors or your bank to notify you when your bill is due or when your payment is posted.
Set up automatic payments. You can authorize your bank or your creditor to deduct the payment from your account automatically every month. This way, you don’t have to worry about missing a payment or paying late fees. However, you still need to monitor your account balance and your statements to make sure that the payment goes through and that there are no errors or unauthorized charges.
Pay more than the minimum. If you can afford to pay more than the minimum amount due on your credit card or loan, you should do so. This will help you reduce your interest charges, pay off your debt faster, and improve your credit utilization ratio, which is another factor that affects your credit score.
Pay early. If you have the money available, you can pay your bill before the due date. This will give you more time to deal with any issues that may arise, such as a delayed payment, a lost check, or a technical glitch. It will also help you avoid late payments if you forget or cannot pay by the due date.
Contact your creditor. If you cannot pay on time, you should contact your creditor as soon as possible and explain your situation. You may be able to get an extension, a payment plan, a hardship program, or a waiver of late fees. Your creditor may also be more lenient and less likely to report your late payment to the credit bureaus if you communicate with them and show good faith.

Summary

Late payments can hurt your credit score and ability to get approved for loans or credit cards. However, you can remove late payments from your credit report by disputing them with the credit bureau or the creditor or by negotiating with the creditor. You can also avoid late payments in the future by paying your bills on time, setting up reminders or automatic payments, paying more than the minimum, paying early, or contacting your creditor.

Here are some key points to remember:

A late payment is when you fail to pay a bill by its due date. It may be reported to the credit bureaus after 30, 60, 90, or 120 days past due.
A late payment can lower your credit score by several points and stay on your credit report for up to seven years.
You can get a late payment removed from your credit report by disputing it with the credit bureau or the creditor or by negotiating with the creditor.
You can avoid late payments in the future by paying your bills on time, setting up reminders or automatic payments, paying more than the minimum, paying early, or contacting your creditor.

SOURCE:
https://www.consumerfinance.gov/about-us/blog/protecting-your-credit-during-coronavirus-pandemic/
https://oag.ca.gov/consumers/general/credit-scores-credit-reports
https://www.discover.com/credit-cards/card-smarts/different-types-of-late-payments/

If you found this information useful, please tell a friend.