How to remove late payments from my credit report

While there are many factors that affect your credit report, nothing has a bigger impact than your payment history. In fact, your history of on-time and late payments makes up 35 percent of what bureaus take into consideration when calculating your credit score. This means that paying close attention to when each payment is due is important for maintaining the good credit that took you so many years to build. Read on to learn more about the effect late payments have on your credit, as well as our tips on fixing your credit if you do miss a payment.

How do late payments affect your score?

Generally speaking, a late payment (also known as a delinquency) can lower your credit score by 100 points or more. This is especially true if you have a higher credit score (600+), as it will cause a bigger drop than if you had a lower score.

Likewise, if you have a short credit history, having just one or two late payments is an important factor that will inevitably hurt your score. This is simply due to the fact that potential lenders don't know you personally and can only judge your ability to make repayments based on the very limited information available from your short history.

Avoiding late payments becomes critical to maintaining and improving your credit score, so it's always a good idea to make payments as soon as possible. “Better late than never” can only take you so far in the world of credit reports and credit scores, though paying late is generally better than not paying at all.

How to remove late credit card payments from your report

Before contacting your lender about removing negative items from your report, you need to determine if the mark was listed by mistake or was an error on your part. Here is how you can get inaccurate late payments removed, whether there was an error on their end or yours.

1. Analyze your late payments

In addition to keeping track of your daily charges and overall balance, you should analyze your credit history at least once a year. Each of the credit reporting agencies Equifax®, TransUnion® and Experian®) allows one free credit report copy every year. By requesting your free report from one of the credit bureaus every few months, you can ensure your credit is in good standing throughout the entire year without spending a penny.

When analyzing your report, any late payment you come across should be under seven years old. Although it’s rare, sometimes older delinquencies can remain on your report after their expiration period. If you do find an older late payment on your report, make sure to call the bureau and file a claim to get it removed.

2. Dispute incorrect claims

If you find a late payment within the seven-year time frame that you don’t recognize, there’s a chance your lender made a mistake when reporting it. You can dispute this claim directly with the credit bureau, with your credit card company or even with your collection agency. After filing a claim, the company has 30 days to investigate before sending through their ruling.

To help make your case, providing proof that you made the payment on time is important. If you can, send through an account statement or payment confirmation on the date you made the payment to help speed the process along.

If you’re trying to improve your credit score by removing late payments that were reported correctly, you have a few ways to approach the situation. However, it’s important to note that successfully removing late payments that weren’t reported in error is very rare.

3. Write a goodwill letter

A goodwill letter is a formal explanation of why a late payment was made that you can send to creditors in hopes of getting your report wiped clean. While not always successful, a goodwill letter is often recommended for those who have fallen on economic hardship due to circumstances out of their control. Examples can include health issues, sudden loss of employment or even natural disasters.

When writing a goodwill letter, it’s important to be respectful, honest and sincere. Discuss your credit history (if in good standing) and the actions you plan to take to ensure a late payment doesn’t happen again. If you don’t hear anything back after several months, consider calling, emailing or sending updates of your current on-time payments to help change their minds.

4. Send a pay for delete letter

If you have a significant amount of debt, you may benefit from pay for delete services. This method removes negative items from your credit report in a settlement negotiation with debt collectors or the original creditor, but it's not without risk. For example, if you make a promise of payment, this extends the statute of limitations and makes collection enforceable on debt that otherwise might be uncollectible.

5. Negotiate with lenders

One of the final options you have for updating your credit report is negotiating directly with your lender. While not always successful, offering to pay your debt up front in a lump sum or setting up automatic payments to prevent this from happening again may be enough to convince your lender to drop the late payment from your report.

This method is especially successful for those who have a long track record of making on-time payments, or those who had a recent financial setback such as a job loss.

How late does a payment have to be to affect your credit?

Legally, late payments cannot be reported to the credit bureau until they’re 30 days past due, meaning you have a month to make that payment without lowering your credit score. If you can’t pay within that 30 days, try to catch up as soon as possible—the longer you wait, the more a delinquent account hurts your score.