How to remove late payments from your credit report?

A credit report is a valuable document. It has its use in different places. Banks and lenders look at credit while granting any loan application. A credit report shows payment patterns and credit usage and reflects credibility. Having a credit report which shows late payments can cause a significantly low credit score. This can hamper loan benefits and interest rates, and cause refused loan applications. 

Most banks and lenders seek a healthy credit report. It shows your reliability as a borrower. In busy schedules, it's often natural to forget payment dates. You have missed timely payments and are seeking ways how to remove late payments from the credit report. This article will guide you with effective tips. 

How do late payments impact a credit score?

Several factors determine a credit score. Each factor is given a specific weightage. On-time payment has the highest weightage among all factors. It comprises of 35 %. It is thus evident that late payments will impact credit scores significantly.  It is therefore essential to know how to remove late payments from credit report.

Another factor is how late the late payment is made. In case a delay of more than 30 days has high negative repercussions. A late payment can stay in the credit report for as long as seven years. This date is calculated from the first missed payment. 

Although there are ways to remove late payments, it is best to make payments on time. There are reminders and payment pop-ups that can help in making payments on time. It is further important to keep track of your payment history in case of technical glitches. This can show wrong information and lead to low credit scores. 

How Should You Remove Late Payments from Credit Report

There are some specific ways on how to delete late payments from credit report. They are outlined below:

1. A Goodwill Letter: This is the most effective way to handle a late payment. Delayed payments can occur due to reasons beyond mere irresponsibility. There can be a major financial emergency, medical crisis and more. Explaining these reasons with proper proof to the lender in a 'goodwill letter' is a hassle-free way to handle this situation. They need to report to the credit agencies. If you have a cordial relationship with them, they might consider and adjust your payment history  

2. Partial Payments: Many lenders do not accept lettered reasoning. In such cases, partial payments can be made. This solely depends on the lender. 

3. Clear Dues: The best way to remove negative payment records is by clearing your dues. This will have the least effect on your credit score. 

4. Auto Debit Facilities: An easy solution to avoid this issue is to avail auto debit system. A single late payment against timely future payments can reduce the impact of the former. 

There are several facilities that offer to remove your late payment history for money. These are mostly not legitimate and can cause further negative implications. It is best to avoid them.

How to dispute inaccurate late payments on a credit report

It is important to check the credit report. This can highlight any erroneous information. Timely payment can be missed and reported accordingly. If this has happened, a dispute should be raised. It can be done with a credit agency or the lender. 

The disputed case will be inspected within thirty days. If the dispute is right and payment was made on time, the lender has to notify the credit agencies to remove and update the report. If the dispute is incorrect, no change will occur.

Conclusion

A late payment can occur due to various reasons. It can be beneficial to know how to get rid of late payments on credit report in avoidable circumstances. It will reduce the risk of lower credit scores and have less effect on future loan applications. It is also helpful to be aware of any misinformation and glitches. Timely action in payment and in raising disputes can lead to a healthier credit report.