Would you like to remove the record of late payments from your credit report? Would you like to learn how to navigate through the various aspects of late payments? Have you ever thought about clearing the record but been put off by the prospect of further complications?
If you answered yes to any of the above questions, you have come to the right place. With this information, you will understand the various ways to remove late payments that have been hindering your financial plans.
Keep in mind that credit repair companies deal with these types of situations all the time, so it is often better to use them then going at it alone. That said, let's go over some of the common ways to deal with this scenario.
Goodwill Adjustment Letter
One of the ways to remove any and all evidence that point out late payments is to ask your lender directly, through a goodwill adjustment letter.
This letter states the reasons why your late payment record should be removed from the report as well as makes a kind request to the lender to remove them. Based on your payment history, as well as your relationship with them, your lender will agree to the removal.
How to Write a Goodwill Adjustment Letter
The process of writing a goodwill adjustment letter is pretty straightforward. Simply ask them to forgive the payments that are late and assure that such incidences won't happen again.
Although you can write this letter without the help of an expert, the amount involved and the seriousness of the situation may warrant seeking advice from a professional writer.
The lender, on the other hand, may or may not forgive the late payment. If they do forgive, your credit report will be adjusted accordingly. However, make sure to obtain the payment forgiveness in writing.
Writing a goodwill adjustment letter may seem like a daunting task, the professionally written being wrapped in legal jargon. Nevertheless, don't let the uncertainty of the outcome scare you, even if it initially sounds ominous.
Pay For Delete Letter
If your debt has been sent for collection, or if you have less than impressive history with your creditor or lender, consider the ‘pay for the delete letter' technique. This letter will be your key to get out of the debt and move forward.
It is a negotiation tool where you pay the full or partial payment in exchange for the removal of the late payment record. You can also offer to set up an automatic payment to make sure future payments are made on time.
The letter should specify what you will be willing to offer, such as full payment, partial payment, autopay, and so on, and the favor from the lender in exchange for it. You will also request a response within a given time frame through this letter.
Inaccurate Late Payment Removal
While late payments on a credit report can evoke images of the inability to make payments on time, sometimes it's simply the result of a clerical or reporting error.
It is very common to find such errors, and if your report has one, you are entitled to request the credit bureaus to correct it immediately. In fact, the Fair Credit Reporting Act requires that the credit bureaus substantiate such errors upon the individual's request.
File a Credit Dispute
Once you notice an error on your credit report, file a dispute with the bureau responsible for generating the report. You can also bring it to the attention of the creditor if necessary. Start with a letter indicating the error to each of the credit bureau that generated the report.
The dispute letter should also state the correct information to replace the error. And do not forget to include any documentation that validates the error as well.
Response From the Credit Bureau
Once the creditor or credit bureau receives your dispute letter, they have the obligation to respond to it within 45 days of the acceptance of the letter. After the investigation is done, the bureau will notify you of the results.
If the credit bureau has enough evidence that the disputed information is a factual one, the record will stay on the report. If the information is incorrect, they will remove it within the specified time.
Credit Repair Questions (FAQs)
Q: When are the late payments reported?
A: The late payments are reported to the credit bureaus after the balance is due for 30 days. Some creditors take longer than that to report the late payments to the concerned authorities. Note that, any late payment will have a negative impact on the borrower's credit score.
Q: How do late payments affect credit score?
A: Late payment in a 30-day period or reported to the credit bureau will lower your credit score of 780 by 90 to 110 points. If the credit score is 680, the score will be decreased by 60 to 80 points. Missing more than one payment will have a significant impact on the credit score as well.
Q: How long do late payments remain on the report?
A: Late payments typically tend to stay as long as seven years. It can stay in your credit history and result in rejected mortgage proposals, student loans, and personal loans. It can also result in failure to obtain new credit or low-interest rates.
Q: Will early payoff of the debt remove a late payment from the credit report?
A: Early payoff of the remaining debt is an option that your creditor will consider for removing late payment records. However, simply paying off the debt without a formal request or agreement with the lender will not remove the late payment. In fact, it can stay there for up to seven years or more.
By requesting the removal through mutual agreements, you can have the debt recorded as “paid” in place of a “charge-off”. Without it, you are considered to be at a higher risk for non-payment by lenders and creditors. In such circumstances, it's extremely difficult to obtain new credit cards.
Hiring a Credit Repair Company for Late Payment Removal
Working with a professional or credit repair organization can go a long way in correcting inaccuracies and straightening out your credit report.
Such professionals have the required knowledge, expertise, and skills to handle credit report challenges. The small fees these companies charge is well worth it to save your time and energy.
This is a much better use of time vs. learning the ins and outs of the process and then guessing that you are doing it right.