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How to Remove Late Payments from Your Credit Report

Payment history is a key factor in your FICO score calculation. In fact,  it accounts for about 35% of your credit score. A single late payment can trigger a significant drop in your credit score, though the impact does fade over time. The late payment will ultimately remain on your credit report for seven years. 

If you’re here, you probably have at least one late payment on your credit report. Don’t worry, there are ways to remove late payments from your credit report with some tried and true methods. 

3 Ways to Remove Late Payments From Your Credit Report

  1. Request a goodwill adjustment

Requesting a goodwill adjustment involves writing a goodwill letter to remove late payments. This letter would explain why the payment was late, and then ask the creditor to forgive the late payment. Any documentation that supports your case would be helpful here. While there is no guarantee that the creditor will make the change, you have a good shot if you have a good payment history and are able to establish a good relationship with the creditor.

  1. Dispute the late payment as inaccurate

If the late payment entry is incorrect, you can file a dispute with the creditor to erase the late payments from your credit report. Once you file the dispute, the creditor is allowed up to 30 days to investigate.

If the creditor finds the late payment entry to be inaccurate, it must notify all credit bureaus it had reported the information to so that they can remove or update it. Any inaccuracy can be disputed – your name, the creditor’s name, payment information, even inaccurate account numbers. 

You can also hire a professional to do this for you. This is exactly what credit repair companies specialize in. We recommend Lexington Law. There is a monthly fee to work with these companies, but it can be cancelled at any time with no long-term commitment. 

  1. Negotiate for late payment removal by signing up for auto-pay

Some creditors may agree to remove the late payment information if you sign up for auto-payments. This assures the creditor that future payments will be made on time, and you won’t have to track payment due dates as long as there is enough money in your linked bank account. It’s a win-win. If the creditor agrees to remove the entry in exchange for automatic payments, be sure to get the agreement in writing.

Why do late payments matter?

Payment history is one of the key factors that lenders use to gauge your ability to make timely payments, and it is the most weighted factor in your credit report. It accounts for 35% of your FICO credit score.

A late payment impacts your credit score within a month. Even if you have maintained a good credit score, one late payment can bring it down. If you have multiple late payments, the impact will be bigger, and they will affect how your ability to be approved for future loans and credit cards.

When do late payments get reported on your credit report?

Most creditors report late payments when the payment is at least 30 days late after the due date. Some creditors may take longer to report the late payments. It’s not uncommon for others to wait up to 60 days past the due date.

If you are several days or weeks late on the payment, you can make the full payment before the 30 days lapse to avoid the payment being reported as late. However, if you are only able to make a partial payment, it will still be reported as a late payment.

Some payments may not be reported to credit bureaus even after the due date. For example, if you’re late on your cell phone or utility bills, you won’t be reported to credit bureaus if you have only missed one payment. However, these bills may be reported if you have missed payments to the point of your service being disconnected. In that case it will likely be reported to the bureaus and your account will be referred to a debt collection agency.

How do late payments affect your credit score?

Late payments can hurt your credit scores, but the severity of the delinquent payment depends on your credit profile and the extent of the late payments.

If you have an excellent credit score, a single late payment has a larger effect on your credit score on an absolute basis. bigger credit score drop than if you have poor credit. For poor credit scores, the late payment will lower your score by a few points. Also, if you have missed multiple payments, the impact will be bigger than if you missed a single payment.

Late payments have a bigger impact on credit scores when they are first reported, but this impact decreases over time. After the expiry of the 7 years, the late payments will drop off from your credit report, and they won’t have a further impact on your credit report.

How long do late payments stay on your credit report?

Late payments stay on your credit report for up to seven years from the date of the delinquent payment. The entry remains on the credit report even if you make the full payment to clear the outstanding payment after it has been reported.

However, you can work on building your credit as you wait for the late payments to be removed after the seven years period. If the late payment was erroneously reported, you can dispute the transaction with the creditor or credit bureau to have the entry removed from the credit report.

How to Avoid Late Payments

Here are some of the strategies you can use to avoid late payments:

  1. Sign up for payment alerts
  1. Sign up for payment alerts

If you have multiple payments from different creditors, you can set up reminders so that you get an alert of upcoming payments ahead of the due date. Some creditors may also allow you to set up text or email alerts so that you receive a notification of upcoming payments ahead of time.

2. Set up automatic payments

If you prefer to automate your payments, you can set up auto-payments either with the creditor. If your creditor allows automatic payments, you can authorize it to pull funds from your bank account when the payment becomes due. However, you should ensure you have sufficient balance in your account at all times to meet the upcoming payments.

3. Ask for a grace period

Check with your creditor to know if it allows a grace period for late payments. Some creditors may allow a few more days or weeks to make up for the missed payment. If the creditor does not allow a grace period, you can request an extension if you expect to make payments after the due date.

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