A look to removing late payments
Keeping up with payments is hugely important – not only to avoid extra charges, but because it can have a negative affect on your credit score.
Your credit score can determine what loans you’ll get accepted for, overdraft eligibility, rental agreements – pretty much anything financial. If you’re missing payments regularly, it’s going to be reflected in your credit score.
However, sometimes missing payments is unavoidable – and it’s not the end of the world. There are ways you can repair your credit history, and remove missed payments from your credit score.
Keep reading to find out more about how late payments can affect your credit score, and how you can get them removed from your credit history. You can also check out this article about removing late payments at Crediful.com.
How do late payments affect my credit score?
Whether you’re late paying your mortgage, your credit card, or an auto-loan, any late payments will be damaging to your credit score.
Once your payment is late by 30 days, there’s a high chance it’ll be reported to the credit bureaus. Even one late payment can cause a drop of up to 110 points to your credit score, which will take years to normalize. The drop in your credit score will generally be higher the higher your credit score is.
There is a chance that the creditor won’t report it to the bureaus, but this is generally if you’re an excellent customer with a flawless payment history.
The late payment will appear on your report as being either 30 days late, 60 days late, or 120+ days late, and each stage will have a different impact on your score. The later your payment, the worse the impact will be – and if your missed payment is recent, then it’ll also be worse.
It doesn’t matter how much you owe – whether it’s $5 or $5000, it’ll still have the same effect on your credit. This makes it easier to know which bills to pay first – the cheaper ones!
How to remove late payments from my credit report
With time, the damage will slowly repair itself until it’s fully dropped off. Unfortunately, any potential creditors will still see the history if it’s listed on your credit report. It will be completely removed from your report after seven years, and your credit score will rise as time goes on – but there are ways to get it removed before waiting seven whole years.
Request a gesture of goodwill
If you’ve been a good customer, and you don’t have a history with them of missing payments, then it’s worth asking for a goodwill adjustment.
If you write a letter to your credit issuer, or call their customer services line, you can request that they remove the missed item. Although there are no guarantees, it’s important to remember that the people on the other end of the phone are human – and if you explain your situation, there’s a chance they’ll sympathise.
If there are extenuating circumstances that have contributed to your late payment, such as illness or a family death, then they’re more likely to consider a goodwill adjustment. Your creditor is more likely to do this than to accept you closing your account and losing you as a customer.
Dispute the late payment
If you have time on your hands, or have money to pay a credit-repair professional, then you may want to try disputing the late payment.
The Fair Credit Reporting Act gives you the right to report any inaccuracies you find regarding your late payment on your credit report. Your creditor will have a set amount of time to verify the information regarding the payment, or it will be removed within 30 days.
Check for any inconsistencies, whether it be the dates, times, or amounts. If you do see anything inaccurate, then send a hard letter to the credit bureaus. Legally, you’ll have to get a response before the 30-day mark.
If you don’t have time to research and contact the three bureaus, then you could hire a professional to do so. You’ll generally have a higher chance of success if you work with a professional, as they have the resources to dispute several items at once.
Request automatic payments
One way of proving to your creditor that you’re reliable is by signing up for automatic payments. This is a win-win for both you and your creditor, as you don’t have to worry about the admin side of keeping up with payments (and no late fees!), and your creditor will have peace of mind knowing they’ll receive the payments on time automatically.
If you can prove that you’re financially able to keep up with the payments, then you’ll have more chance of getting them to remove the missed payment. This is easily done – you can show them proof of income, or proof of disability – if they can see you can make the payment, then they’re likely to be more relaxed about the situation.
