Your credit report takes a serious hit when you’re reported to have late payments on your account. Worst yet, these late payments stay on a credit report for seven years. Do you have an account that shows a late payment? Would you like to remove it entirely? Of course, you do!
Interestingly enough, you have four things that can be done to repair your credit report of a late payment.
Allow Time To Work Its Magic
Late payments stay on the report for seven years, but it doesn’t affect the score the entire seven years. And, after seven years, each of the three main credit bureaus – Equifax, Experian and TransUnion – will remove it.
According to a VantageScore study, one late payment can drop a credit score by nearly 120 points. However, 18 months later, the effect the late payment had is gone. Instead of calling the credit card company about the late payment, consider letting time to do its things. Repair your credit by paying accounts before they’re due and ensuring a low credit utilization rate. This is the easiest method when you don’t need a loan for something right away.
Negotiate With Creditors By Signing Up For Their Automatic Payment System
Your creditors like having automatic access to your bank account. If you want to reduce the number of late payments you have, consider signing up for the creditor’s automatic payment system and ask them to remove the late payment information from the report as a good gesture.
While not all creditors will work with you, it can be a win-win scenario if you play your cards just right. You’ll get the negative mark off your report, and you’ll never make another late payment. Your creditors will also attain on-time payments.
Be sure this agreement is put into writing before signing up for the service.
Write A Goodwill Letter
Consider writing your creditors a goodwill letter letting them know of a personal hardship (Death in the family) that led to the payment oversight. This goodwill letter may be enough for creditors to remove the late payment mark.
The idea of the letter is for sympathy – sympathy from the creditor. Thus, you want a short, right to the point letter. Make sure you express appreciation for them taking the situation into consideration for removing the negative mark.
On the opening and closing of the letter, request that they remove the late payment mark on the credit report. While it may or may not work in your favor, you don’t know if you don’t try. Don’t do it right away. Wait a couple of months of on-time payments before you send the goodwill letter. This shows them that you were serious about the situation and have made on-time payments after that.
Submit A Dispute To The Credit Bureaus
Consumers have the right to a fair and accurate credit report. With that said, if you see a late payment you know is wrong, you can dispute the error. If you dispute this mark, the creditor must verify that it is accurate within 30 days. If not, the credit bureaus will remove it after that.
In order to dispute errors, you need to check out your credit report. If you see mistakes, send a dispute letter to the three main credit bureaus – TransUnion, Equifax and Experian. You can also file disputes online. The addresses to each bureau are:
Fraud Victim Assistance Department
PO Box 2000
Chester, PA. 19022-2000
PO Box 9554
Allen, TX. 75013
PO Box 105069
Atlanta, GA. 30348-5069
If you need some additional help filing a dispute, consider hiring a professional credit repair company to do it for you. These folks work hard to remove tax lien, late payments and other negative remarks from your credit report. And, they tend to do it much faster than a consumer can, which is nice if time is of the essence.