Credit report is basically a method that lets prospective lenders evaluate your financial background to help predict your future credit behavior. They are used to assess if you are fit to make the payments on time. So if a late payment record is listed in your credit report it can greatly affect you adversely. This will drag down your collective credit score due to negative contribution during calculation. So it is always helpful if you could remove this from the credit report. This article will focus on the different aspects of late payments. Hopefully by the end of this article, you will have a clean track record in your credit report click here.
Why do late payments appear on your credit report?
Before trying to remove the late payments from your record, it might be wise to learn how the records appear on your report in the first place. This knowledge will prevent you from making further mistakes. This can happen due to two different reasons.
- Accurate report: If the report made by the lender is true, that is, if you did pay late. If this is the case, you will be learning to solve this in the later part of the article.
- Misinformed report: Sometimes the late payment record maybe due to a human or technical error. This is quite easy to solve. File a dispute or mail a courier stating the issue to the lenders. Make sure that you ask for a Return Receipt. If they refuse to comply, then you can request them to remove the error by using the Fair Credit Reporting Act (FCRA). Try to get a rapid rescoring after rectification of error.
Why is it necessary to remove late payments from your credit report?
As mentioned above, late payments will bring down your total credit score. Though this might not seem like a big issue at present, leaving it on your record is a mistake that will come back to haunt you in the future. The late payment record can stay on the report for as long as 7 years. Not only will this cause issues when you are trying to get a loan, it will also indirectly affect your interest rates. So wipe this off your record as soon as possible.
How to remove the late payments?
- Contact the original creditor and request them to grant a “goodwill adjustment”. Most creditors will be glad to do this if your other track records are quite consistent. This is probably the easiest way, if you have good relations with your creditor.
- Negotiate and find out if the creditor will be willing to remove it in exchange for signing up for automatic payments. This is a longshot, but doesn’t hurt to try.
- Try to prove that the late payment record is inaccurate. This method basically involves exploiting the loopholes in the system like incorrect dates, amounts, etc.