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Your credit score is intended to help lenders understand if you’re going to make a payment on time, which is why a late payment makes a big impact on your score.
What’s important to note, however, is that late payments that don’t belong can definitely be removed. Even better, even if you did make the payment late you may be able to get that payment removed.
What You Need to Know
Accounting for 35% of your FICO score, your payment history is the absolute most important thing on your credit report and toward your score. Even if you’re the type of person who does everything else right, just one late payment could cause you a whole lot of problems, and it could stay on your report for up to 7 years!
Where it Matters: You may be surprised to know that late payments on your credit report can actually be used by employers, landlords and even insurance companies to determine what you’re eligible for. That’s because a lot of people are looking at your score.
What it Does: When it comes to the points it’s going to make a difference just how late you actually are, and how often you tend to be late.
- If you haven’t hit the 30 day mark yet then chances are you’re probably safe. Your lender won’t generally report anything that’s less than 30 days. But after that you get different amounts of points impact for different lengths of time, like 30 days, 60 days or 90 days. You’ll probably get more points docked for a 90 day late payment than a 30 day late one.
- If you tend to miss payments or be late on payments frequently then you’re probably going to be in trouble with your score. If you’ve only made a mistake once a twice, however, you might be able to balance it out.
- The impact can be felt within as little as one month, because lenders tend to think that your most recent history is the most likely predictor of your future behavior.
Monitor Your Report
The most important thing you can do is keep an eye on all three of the major credit reporting bureaus – Experian, TransUnion and Equifax, to make sure all of the information they’re reporting is completely accurate.
Generally, you’re going to see late payments more on credit accounts.
You’re also likely going to see some type of mark that differentiates a late account from the rest of your accounts. But this is going to depend on the credit reporting agency that you’re looking at. It’s also going to depend on whether or not they mark just how late that payment actually was.
By looking at all three of the versions of your credit report you can be kept better informed, especially since they may not always be the same.
Does it Last?
Unfortunately, a late payment can stay on your report for up to 7 years. That’s definitely a long time, but it doesn’t mean you’re barred from doing anything at all with your credit for 7 years. It just means you might have a little bit of something to explain or a harder time if you don’t work on other areas of your credit.
As you continue to move forward and that late payment is further back your score will continue to rise. But if you want to get rid of it permanently, before that 7 years, you may be able to do just that.
Find out right here how you can make a dispute and what you can do when it comes to removing your negative payment history.
Can I Make it Disappear?
The best case scenario is going to be if you have an incorrectly reported late payment on your credit report because these can be disputed easily.
If there’s anything on your report that’s not true you have the option to file a dispute with the credit reporting agency that’s reporting it. You can also send information about the problem directly to whoever is the creditor for that account to make sure they send accurate information to the reporting bureaus.
Once you file a dispute with a creditor they get a full 30 days to look into the issue. They can then decide to stand by the payment and that means they’re not going to change anything. On the other hand, if they look into the problem and realize they’ve made a mistake they are required to contact the credit reporting agency and notify them of the information. They have to make sure that the information is updated because they made the mistake.
For disputes to the credit reporting agencies you want to dispute it to each agency, not just one. They too will get a full 30 days to look into the issue before they have to make a decision.
Removing Correct Payments
Now, if you really were late on a payment and you want it to be removed it can be quite a bit different and a lot more difficult too.
What you want to do is take a closer look at your credit history to see how you’ve done up to that point. Also, look at whether you’re willing to put in all the effort it could take to get that payment removed.
If you’re willing to go for it then take a chance at one (or more) of these four options.
1. Write a Letter
The first thing you can do is to write a letter to the creditor specifically. This isn’t a letter where you want to air your grievances. This is where you want to be polite, respectful and explanatory. Go ahead and tell them why you missed your payment. It might be too late, since the creditors you have are supposed to report accurate information and they may not be able to pull that information back.
For those who pay before the 30 day window has expired and before it shows up on the credit report you may be able to convince your creditor not to report the payment as late in the first place. If you’ve never paid late before you may be able to get things resolved easier.
2. Make an Offer
Not all creditors are going to make an adjustment just because you ask, so that’s when you want to look for a different option. Negotiating with them may do the trick. For example, you may be able to offer automatic payments or even a paid off balance in exchange for removing the late payment.
Unfortunately, not all creditors are going to allow you to do this and you may not be able to make any headway at all.
You may have to accept the black mark on your report and just keep making your future payments on time. If you do this and you also make sure that you’re following the other rules that one late payment won’t count against you as much as you might think.
As you continue moving on that late payment will start to fade away even more and your more recent history is going to make a much bigger impact.
3. File a Dispute
You can dispute the late payment if you choose to, even if you feel like the late payment is accurate. If you dispute to the credit reporting agencies they have to request proof from the original creditor within the 30 day period. The creditor then has 30 days to make a response and prove that the payment was actually late. If they don’t, that means the dispute is automatically decided in your favor and that means the late payment will be removed.
But it’s important to note that if you’re dealing with a large company you’re also dealing with a large department for credit disputes. They’re generally pretty good about responding to everything with the proof that’s needed. You likely won’t get anywhere with this method, but it can’t hurt, right?
It All Comes Down to This
Basically, you want to make sure you pay your bills on time because history of payments is the most important thing you’re going to find on your report. And a late payment that stays for 7 years is going to be a problem.
Still, if you happen to find a late payment on your report, accurate or not, make sure you’re doing whatever you can to try and get it removed.