Late Payments On Your Credit Report? Here Is How To Remove Them
If you are guilty of making late payments, you can expect that they are listed on your credit report. If you don’t know, late payments play a huge factor in determining your FICO score which is the number most lenders look at. With that being said, there are things you can do to try and have those late payment dings removed from your credit report.
How late payments affect your credit report
Seven years, yes seven years, is how long you can expect late payments to remain on your credit report. You can expect that to lower your credit score which means it is harder to get a loan and favorable interest rates. Due to the current pandemic, you can get weekly access to a free credit report from the three credit bureaus (Equifax, Experian, and TransUnion) through April of 2021. Take advantage.
Here are 3 ways you can get late payments removed from your credit report
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Look into a “Goodwill Adjustment”
You may think there is no way to remove something from your credit report but in actuality, creditors are happy to do what is called a “goodwill adjustment”. This applies for those people that already have a positive payment history and have established a good relationship with the creditor. All you need to do is write a letter to the creditor explaining your current financial situation. Ask them to forgive your late payment and adjust your credit report accordingly. Now, this is not for people who have multiple late payments. This is for the one or two missed payments you got caught up in. Here is a sample goodwill adjustment letter as an example.
Offer to set up automatic payments
If you contact a creditor and offer to set up automatic payments, they may just remove your late payment entries. This is beneficial to both parties since the creditor doesn’t have to deal with any more late payments and you will no longer have to remember to make your payments. You will also avoid those pesky late fees. This is also good to try out if the goodwill letter does not work.
Dispute the late payment on your credit report
If you believe that there are inaccuracies on your credit report with regards to dates, amounts, etc., you are free to dispute that late payment as being inaccurate. Creditors can often have a hard time verifying exact details of your account history. For this reason, preparing a dispute letter about the inaccurate late payment is a good idea. If the creditor doesn’t or can’t verify the entry, it has to be removed from your credit report per the Fair Credit Reporting Act (FCRA).
Rebuild your credit
Late payments on your credit report means you will need to work at increasing your credit score. The key thing to do now is make sure all payments moving forward are made on time. Use the calendar on your phone and set up automatic payments so that you are never late again. You also want to make sure you are not running up your credit. You want to stay under 30% for your credit utilization rate so that your credit isn’t negatively impacted.
Ways to borrow with poor credit
If your late payments remain on your credit report, you can still borrow money. You just want to stay away from predatory lenders who are out to rob you with high fees and interest rates. Here are some ways to get access to money with poor credit:
- Apply for a loan from a credit union: Credit unions usually have lower fees and their loan applications are based on more than just a credit score.
- Try a peer to peer loan: Websites like Prosper, Lending Club, and Peerform connect you with individual loan providers where you will get a better rate even with bad credit.
- Get a secured loan: This is a loan where you put up some form of collateral such as a home also known as a home equity loan.
- See if you can get a cash advance, payday loan, or tax refund loan.
- A cosigner may be able to help you: They will apply for a loan with you and you make the payments. If you can’t make them, the cosigner needs to then make them. This is obviously a little more risky for the cosigner.