A late payment can drastically reduce your credit score and might even show up on your credit report for up to 7 years. So, stay on top of your payments and avoid any late payments whatsoever. At times, even a timely payment might inaccurately be recorded as a late payment on your credit report. If that’s the case, then you must immediately raise a dispute about the same and get it removed from the credit report. If you have a history of timely payments and then end up making one or two late payments, you might probably get in touch with the creditor and request its removal.
There are two reasons why late payments are included in the credit report. The first reason is you made a late payment and that you are at fault. The second reason is you were not at fault, and the late payment is an erroneous entry. If you are certain it is an inaccurate entry, then get in touch with the credit bureau that compiled your report and raise a dispute. All credit bureaus have a legal obligation to provide true and accurate information. So, the inclusion of an inaccurate entry will not only damage their reputation but is also legally wrong.
Once you raise a dispute about a late payment, the credit bureau will look into it, and if after the investigation your claim proves to be true, then the inaccurate entry will be rectified. However, if you did make a couple of late payments, you might still have a chance to get it removed from your credit report. If this is the approach you’re looking at, the first step is to make a polite request to the concerned data furnisher about the same. Try to explain your situation and make a promise to ensure timely payments in the future. There is no guarantee that this approach will work, but there is no harm in trying. If it does work, then you can successfully remove a black mark from your credit report.
Regardless of the validity of the reason why a late payment is mentioned in your credit report, it is in your best interest to ask for its removal.
If you realize there is an inaccurate entry about a specific late payment in your credit report, raise a dispute about it. At times, you can raise a dispute about the same even if you are at fault. Once again, I am stressing the fact that there is no guarantee that this method will work.
The first step is to carefully go through your credit report and identify any problems present in it. Check the credit report provided by other bureaus to check for any inaccurate entries. Once you identify the problem, get in touch with the creditor. Usually, the creditor will be more than willing to correct any inaccurate information and inform about the same to the credit bureau. After this, you must get in touch with the concerned credit rating agency about the inaccurate late payment. You are essentially raising a dispute by doing this. After you do all of this, check your credit report to ensure whether the issue has been fixed or not.
If the creditor immediately resolves the dispute, the process will come to an end. If you are raising a dispute with the credit bureau, it will take a while longer. Usually, major lenders or financial institutions take prompt action when it comes to handling any dispute. If you feel like your dispute was wrongly denied or that you were doled out unjust treatment, you have a right to register a complaint about the same with the consumer financial protection bureau. Let us revisit the steps, which were explained briefly until now.
The first step is to make sure you have your credit report from all the three major credit rating agencies. If you are 100% certain about the inaccuracy of the late payment, then carefully go through the details corresponding that entry. Some details you must consider are the name of the lender, your account number, the amount mentioned, and the due date. If you’re starting an online dispute, you might be provided with the list of inaccurate in entries. You might not be able to explain your story for raising an online dispute fully.
If it comes to your notice that the late payment recorded in one or more of your credit reports is inaccurate, then you must immediately contact the concerned lender or the creditor who has reported this information to the bureau. If the lender happens to be a credit card company, then immediately call the helpline number and verify the inaccurate entry. If you have used www.annualcreditreport.com to obtain your credit report, then the information about the concerned lender who reported the entry will be mentioned in the report. It is your immediate duty as well as the responsibility to notify the lender about the error immediately. If it is a genuine error, the lender will act promptly and take the necessary steps to fix it. At times, you might also be asked by the lender to provide proof of the timely payment you make. You can use your bank statements or any other supporting document to provide the required proof. If the lender is satisfied with the proof you furnished, they will take steps to fix it.
If the lender agrees about the inaccuracy of the entry made, then get the confirmation about the same in writing. It is always better to have a written verification because if the lender disputes your claim in the future, you will have proof on your side. Once the lender has accepted the error, he must inform the credit bureau about it as well. If you want, you can always approach the credit bureau directly and raise the dispute. If you ended up paying any late fee or penalty due to the inaccurate reporting, you could claim reimbursement for it from the lender or creditor. If this doesn’t work, and the lender denies the dispute even when you are right, contact the credit bureau immediately.
The credit bureau can take anywhere between 30 to 45 days to verify your claim and revert their findings to you. You might have to submit all the required proof to support your claim while doing so. Feel free to raise a dispute online, through the mail, or even via the telephone. If the investigation proves that there was no error, then the credit report will stay unchanged. However, if there is an error, you will receive a free copy of the updated credit report.
You can follow the steps only when you’re not at fault. However, what can you do if you are at fault? You might be able to get the late payment removed from your record, but the chances are quite slim. It might not necessarily happen, but what’s the harm in trying? While doing this, don’t try to lie your way out of it. Keep in mind that the electronic systems used for verification are quite accurate these days. The lender might take a while to verify your transaction, but you cannot get away with it. Making any false claims will worsen your relationship with the lender and might also close any existing lines of credit you have.
You can try negotiating and convincing the lender for the removal of the late payment. To do this, keep in mind you will have to do a lot of negotiating and come to an understanding. There is no guarantee this can walk. The lender has no obligation whatsoever to meet your request. So, try making an honest appeal to get the negative remark of your credit report. For instance, if there was some technical error, which prevented you from making the payment on time, you might be able to explain your situation to the lender. Or perhaps there might have been certain unforeseeable conditions that prevented you from making the payment. Regardless of the reason, if it is an honest reason, you might be able to convince the lender to change the entry.
Avoid Late Payments
When you make a late payment, you will not only have to pay a fee or a penalty, but it will also harm your credit score. A couple of late payments means you will not be eligible for lower rates of interest and might end up paying high rates. Also, if you’re late on a payment by more than 30 days, it will show on your credit report and will stay there for seven years. So, it is a good idea to take steps to prevent making any late payments in the future. You must do this, especially if you’re trying to improve your credit score
Perhaps the easiest way to avoid any late payments is by automating your payments by signing up for a service like autopsy. By doing this, you are essentially authorizing a credit card issuer or a bank to make automatic payments for certain monthly expenses on time. You can use this service for automating monthly utility bills to avoid any late payments. Before you sign yourself up for any of these services, ensure that you have sufficient funds in your account if not automatic payments will not be possible. Also, check if any fees or charges are applicable for using such services. Timely payments will help improve your credit score in the long run.
If you aren’t too keen about automating any payments, ensure that you pay all your bills before the due date. You can set reminders on your smartphone or even maintain a journal to do the same. There are various online services you can use to set reminders about the same. Also, financial institutions that have given you loans will also provide online reminder services. So, contact your bank and enroll yourself for their online alerts.
Another simple technique, which you can use to ensure prompt and timely payments, is to divide your payments and pay them on a weekly basis. Make a list of all the expenses at the beginning of the week and ensure you clear them by the end of the week. This is a great way to start budgeting and managing your finances. You can develop mindful financial habits by doing this. If you know that you are required to make certain weekly payments, you will become conscious about your daily expenses.
Call your lender
If you missed any payments, you must immediately make the payment and then contact the lender. Try to take action as quickly as you possibly can to remedy this situation. As mentioned, even one late payment can cause significant damage to your credit score. If you have a good track record and have been punctual customer, the creditor might be willing to waive off a single late payment. However, don’t make a habit of making late payments regularly.