Late payments are bad for your credit score and staying power in the mortgage market, so they have to be removed from the credit report if you want to buy a house.
This is why, if you have a credit report, one late payment has the potential to lower this score. Credit lists portray a history of timely payment and if the payments have been delayed then the records will show it. This is a signal to future lenders and one may find it hard to be approved for loans, mortgages, and credit cards among others, luckily there is always a way you can try to have the late payment removed from reporting. Here’s a step-by-step guide.
Check Your Credit Reports
The first thing to do is review your credit reports from Equifax, Experian, and TransUnion, including any notices they have provided regarding activities in your accounts. You can get free once per year at the annualcreditreport.com. Review entire account and entry lists and record any outstanding payments. It is also important to verify the dates, the amounts, the outstanding figures, credit limits, and other details that may be stated on each entry.
Determine Eligibility
However, not all the kinds of payments that are made after the due dates are qualified to be deleted. In general, if the late payment is true and you indeed missed some payments you are unable to have them deleted, as those are factual records of your credit history. But if there were compelling conditions like the financial hardship programs, illness, mistakes in the reporting, and so on, you might be able to cogently argue its reversal.
Also, understand that even if you have made some payments a little late, these are provided on your credit report for not more than seven years. Should the late payment be older than that, it must be deleted in the first place. It is possible to contest entries that are older than seven years to make them expire faster.
Draft Dispute Letters
The next course of action is to write initial letters of dispute to the three credit bureaus that reported the late payment. This statement should be composed simply as follows: STATE THAT YOU ARE DISPUTING THE LATE PAYMENT WITH THE CREDITOR’S NAME, ACCOUNT NUMBER, REPORTING period ETC. THEN EXPLAIN IN CLEAR LANGUAGE THE REASONS THAT WARRANTED THE ATTACHMENT OF SUPPORTING DOCUMENTATION IF ANY.
Some common reasons to cite for removal include:
- Loss through sickness or temporary job loss at the time.
- Mistakes in numbers – dates, quantities, or any other numerical values
- The reporting period may be more than seven years
- Payoffs or payments through hardship management plans
- Identity theft/ forgery
Sending the letters via certified mail
It is always advisable to keep photocopies of such letters and where possible the originals should be posted using a courier service that involves sending the letters through the post office and requesting the recipients to sign for them. This will serve to act as evidence that the credit bureau has received your letter. The agency then has 30-45 days to review your appeal and launch an investigation into your grievance. If they cannot substantiate the late payment, they are obliged to delete it from your credit report by legal provisions.
Follow Up Accordingly
If the late payment stays with the credit bureau after the investigation has been completed, you can file an explanatory statement to the credit file or contact the CFPB to file a complaint against the collection agency. Once it has been successfully deleted, it is recommended that you monitor your credit reports from time to time to avoid the re-emergence of the error. Habits of credit checking and proper management are the key to maintaining a good score.
It may be possible to persuade a credit provider to delete a late payment from your credit record, this may be time-consuming but the benefits are long-term since it enhances your credit status. Therefore, with a clean credit file, you will be able to secure better rates and terms that are available with loans that are involved in mortgages, auto financing, credit cards, and the rest.
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