Your credit score is comprised of a number of factors, not the least of which is your history of on-time payments. If you made the unfortunate mistake of being late on a payment for a credit card, student loan, mortgage, or personal loan in the past, it may seem like all is lost.
However, there are ways to remove a late payment from your credit history without having to wait the standard seven years it takes the credit reporting agencies to get rid of that negative information when it falls off. Here are our top three tips for getting your credit back on track and improving your credit score by removing late payment information from your credit report.
1. The Goodwill Adjustment
The majority of lenders are aware that late payments often occur due to unavoidable financial circumstances. If this is the case for a late payment rearing its ugly head on your credit report, you can work to get it removed by requesting a goodwill adjustment through the creditor in question. A goodwill adjustment is simply a creditor agreeing to remove a late payment notice sent to the credit reporting agencies upon your specific request.
To request a goodwill adjustment, it is necessary to first have a strong relationship with your creditor. If you have recently missed another payment or are behind on paying minimum balances, your request is likely to fall on deaf ears. However, if you have shown your creditors a strong tendency to make payments on time and pay balances due, you have a good chance to get a late payment notice removed.
You want to make a goodwill adjustment request in writing, including an explanation as to why your payment was late. Simply ask for forgiveness by requesting your creditor adjust the late payment entry with the credit bureaus. A number of sample letters are available online that provide guidance on what information should be included in your goodwill request.
2. Dispute the Information
If you see a late payment entry on your credit report and know or otherwise feel that information is inaccurate, your best bet is to dispute the entry through the three credit bureaus. Part of the dispute process is a verification of the late payment information, including details like the amount, the date payment was received, and the actual due date. If creditors are unable to provide this verification for a late payment entry, they have no choice but to delete the information from your credit history.
The dispute process is most easily done through the online dispute form found on each of the three credit bureau websites. You will need to provide some details as to why the information is inaccurate, and then have a heavy dose of patience. If the item being disputed is inaccurate it will get removed from your credit report. If the item is indeed accurate, but the creditors fail to respond in a timely manner, you will notice the late payment entry removed completely from your credit report as well.
3. Negotiate with the Creditor
While a less viable method, negotiating with your creditor has the potential to help in removing late payment entries on your credit report. For some individuals, speaking directly with a creditor and coming up with a mutually beneficial solution has resulted in seeing late payment fall off a credit report.
Typically, negotiations include you as the borrower agreeing to certain terms, such as creating automatic payments to ensure timely repayment, in exchange for the removal of a late payment entry. This relationship benefits the creditor since they are now guaranteed to receive what’s owed to them on time and in the right amount; it also benefits you as the borrower as late payments are removed from your credit history and you can worry less about missing a payment due in the future.
Removing late payments is one method to improve your credit history and ultimately, your credit score. On average, individuals see their credit score increased by 15 to 40 points as late payments fall off their reports. To take charge of your credit history, first, simply ask creditors to remove late payment entries with a goodwill adjustment request.
Follow up with disputes for inaccurate or unverifiable information, and then work directly with your creditor to come up with a solution. One of these methods should lend a necessary hand in getting late payments removed from your credit. It really does happen, but don’t count on it if the disputed item is legitimate and you have a long history of missing your payments. At that point the only way to fix it may be to wait 7 years for it to fall off.
