Q&A: How do I remove a late payment from my credit report?

Question: How do I remove a late payment from my credit report?

Answer: The steps you need to take to remove a late payment from your report depends on whether the item is an error or if it's accurate. If the information is inaccurate, there are steps to take that give you a good chance of having it removed from your report. But if it's the truth, then it's difficult to predict the outcome.

Let's take a look at each scenario and review what steps you need to take.

Removing an error from your credit report

If the late payment showing up on your report is inaccurate, then the path to having it removed is straightforward. Check your reports so you know which bureau to contact. You can get free reports every 12 months from each of the three major credit bureaus at AnnualCreditReport.com.

Contact the agency (or agencies) that is reporting the false information. Credit reporting agencies must investigate disputes within 30 days unless they determine that your claim is frivolous. The agency will contact the creditor who reported the false information. If the information is proven to be false, then the creditor must contact the agencies that received the erroneous information and ask it to be removed. Check out the Federal Trade Commission's website for a sample dispute letter.

Removing negative, but accurate, information

Okay, if you did make a late payment and it was reported to the bureaus, then you'll need to negotiate with your creditor. Before you make a call, though, think carefully about the events that led to the missed payment. Was there a family crisis? Did you experience sudden unemployment and didn't realize you should call and let the company know you couldn't pay?

As an example, let's say you made a late payment on your credit card bill. In this case, you'll want to call your issuer and ask to speak with a supervisor. But before you make the call, write down a few bullet points to cover so you sound in control. You don't want to ramble and sound panicky.

You want to explain your situation and politely ask if the late payment can be removed from your reports since you've been a great customer up until this point. If the person you speak to isn't able to grant your request, then ask to speak with that person's supervisor. If the customer rep refuses, then say good bye and call back in 10 minutes and you'll get someone else.

You most likely have also paid a late fee. You can try to get your money back for that, too. It doesn't hurt to ask. But if you succeed in getting the late payment notation removed from the reports, that's a big win all by itself.

Now, if you have a history of missed payments, then don't expect to have your late payment information removed. Negotiating with a lender works best when you have a good history. If you really are in a crisis, though, and this is what caused the late payment, consider talking to your credit card company's hardship department. Depending on the situation, it's possible to get some relief, such as a reduced minimum payment or reduced APR, for a year or so.

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