If you have ever seen your credit score suffer as the result of a simple late payment, you know just how frustrating this situation can be. With one simple mistake, your hard work building a good credit score can be undone.
Does this sound familiar to you?
Fortunately, with the right approach, these late payments can often be successfully removed from your record, restoring or raising your credit score.
While I have personally worked with tons of clients to successfully remove late payments from their records and restore their credit, I wrote this comprehensive guide for those who can’t afford my paid legal services or would simply prefer to do it on their own.
So for those interested…I’m presenting an actionable, 3-step plan to remove recent 30-day late payments from your record!
In addition, the same strategy applies for 60, 90, and 180 day late payments.
For you, what’s most important to know right now is, recent late payments NEVER come off with simple credit bureau disputes or sample goodwill letters (I’ll explain why later). Also, when I say recent, I mean anywhere from today to 4 years ago.
However, over the last 15 years, I’ve perfected the method I will teach in this article. I’m sharing it here so that you don’t have to do any guesswork.
Because let’s face it trying to remove a recent late payment on your own can be a frustrating process, to say the least. Oftentimes, you will encounter one or more of the following:
– Creditors give you the run-around and are extremely unhelpful.
– You can spend hours on the phone each time you call, only to be disconnected.
– You’ve read conflicting views from self-professed “experts” about sending a “courtesy removal letter” or a “credit bureau dispute letter”.
And what’s more, if you’ve hired a credit repair company or so-called “law firm”, chances are:
– You’ve wasted $1000+ in upfront fees without seeing any results.
– They put in ineffective credit bureau disputes and goodwill requests.
– You find yourself at the same place where you started.
All of that being said, with the right strategy and a little persistence, it is totally possible to remove late payments from your record and improve your credit score.
So, before we get into the specific strategies I use, I want to quickly show you some proof that this process works.
Proof this process works…check out these 4 deletion letters:
The process is only as good as the results it yields. Fortunately, I have the results to prove the process.
These are 30-day, 60-day, and 90-day late payment deletions that I achieved for my clients with Macy’s, Barclaycard, Capital One, and Chase credit cards just this year…
Over the years, I have helped countless individuals remove late payments from their credit records. To find out if my services are right for you, click the link below to book your free consultation.
Now that we know the process works, let me clear up some misconceptions about missed payments.
How does a 30, 60, or 90-day late pay affect the credit score?
Simply put, if you have a good credit score, a new delinquent payment will affect your credit score far more negatively than someone who already has a poor score.
Here are the facts:
If you have a good score of 680 or higher, a new late payment is going to sting badly. A 30 day late may drop your score by around 80 points.
A 60 to 90 day late will drop your Fico score 80 to 120 points! Ouch.
You may be wondering how long it will take for your credit score to recover after the late payment.
The saddest part about a late payment is, your credit score will only increase by 1-2 points per month. There will be a slight increase once you bring a delinquent account to current, but after that, your credit score will recover extremely slowly.
As a result, you won’t be able to get approved for any good credit cards, loans, and mortgages for years to come.
How long does a skipped payment stay on your credit?
If you miss a payment today, and it’s reported 30 days late on your credit report, then…
Get ready for this…
The late payment will become part of your credit payment history and stay on your credit report for 7 years.
And worse, even paying off or closing the account will not remove the late payment any sooner. The so-called ‘pay for deletes’ only works with collection accounts.
NEVER dispute a recent late payment with the credit bureaus
Lots of credit repair “experts” encourage you to dispute the late payment with the credit bureau with the idea that it is supposed to miraculously get you results “if the creditor does not respond within 30 days.”
In reality, this is one of the biggest mistakes you can make.
Why? Simply put, technology.
Today, credit bureaus have modernized their systems and switched to automatic dispute verifications where they correspond with the creditor via their data exchange interface, E-Oscar.
Hence, unlike the older days, no phone calls or handwritten communication is exchanged between bureaus and creditors. This interface verifies millions of accounts that are disputed by consumers every month in a matter of minutes. It does so by simply cross-referencing databases of the bureaus and creditors.
However, credit bureau disputes may work with a minor degree of success for one type of late payment:
A very old late payment on an account that’s been closed for at least 3-4 years or longer.
They can also be effective for questionable older collection accounts and charge-offs if you utilize the dispute the right strategy.
That being said, keep in mind that disputes are not effective for late payments that really matter such as recent late payments or late payments on open accounts.
What’s worse, if you go behind the creditor’s back and dispute a recent late payment with the credit bureaus, they will easily verify it, thanks to E-Oscar. Then when it’s time for you to deal with the creditor directly, they will hold this against you.
Feel like you may need help removing late payments from your record? Click the link below to book your free consultation.
Can a late payment be removed if it was caused by the Covid-19 pandemic & shelter in place orders?
The answer to this is yes, IF you had a late payment for the month of March 2020 or after that, but not before.
The economic fallout from the coronavirus has caused lenders to make exceptions for those who suffered a loss of income or health complications as a result of the pandemic.
If you find yourself in this situation, the first step would be to simply call the creditor and see if they’ll be able to issue a courtesy removal of the late payment. They may ask you to prove your loss of income or health complications.
Read this article about how to address and remove Covid-19 related late payments.
However, lates for February 2020 or prior will not qualify for goodwill deletion under the Covid-19 pandemic situation. In that case, you’ll likely need professional help.
Will creditors delete my late payment history if I submit a goodwill letter?
Now that we’ve explored late payment disputes, let’s talk about goodwill letters.
If you’re familiar with the subject, you may know that goodwill letters used to work to some extent to remove late payments from your credit record. However, that was 10-15 years ago.
However, at this point in time, the bottom line is…goodwill letters do not work. In fact, many bank websites say so explicitly.
What’s more, submitting a goodwill letter may actually decrease the chances of removing a late payment from your record (the only exception here is if the late occurred exactly during the Covid-19 pandemic).
But the sad part is, every self-proclaimed “credit expert” (and even credit repair companies) still claims you will achieve forgiveness on a late payment with a goodwill letter.
As a result, many folks end up wasting their time sending courtesy removal requests to creditors. Lots of other people have wasted money with ineffective credit repair companies, including the likes of creditrepair.com and Lexington Law Firm, who’ve been known to prey on customers and have been sued by one of the government’s regulating agencies.
Want more proof that goodwill letters are a waste of time? check this out:
Here is Bank of America’s own website stating that goodwill letters will not work.
Bank of America says the following:
“We’re required to report complete and accurate information, and that’s why we aren’t able to honor requests for goodwill adjustments.”
As per the FCRA (Fair Credit Reporting Act), creditors are required to report accurate payment histories to the credit bureaus. Again, the only exception here is if you were affected by the Corona Virus pandemic.
Why creditors DO NOT want to help you fix your payment history?
At this point, you may be asking, “Ali, it’s just one stinking, lousy, ten-dollar 30-day late payment, and I’ve always been on time and have been a loyal customer. Why wouldn’t the creditor just not remove it?”
Here’s what you need to know; The regulatory agencies constantly audit creditors.
If they find a company reporting their consumers as current despite them being late, then this can be interpreted as the company trying to conceal the defaults from shareholders. This may lead to a heavy regulatory fine for your creditor.
Unless you’re a victim of fraud and or identity theft, the only way to remove a recent late payment from the credit report is by getting the original creditor to agree to remove the late payment.
And remember, Credit Bureau disputes will not work for late payments unless the late occurred over 4 years ago on a closed account.
Luckily there is a way around this! I have had tremendous success in getting creditors, even stubborn ones like Barclays, JP Morgan Chase, and Capital One, to remove 30, 60, and even 90-day late payments.
I have done this by providing the creditors with a chronological letter, backed with proof, which explains the following:
1. Why the late payment occurred in the first place.
2. Why the consumer was not aware the bill was due.
3. What extenuating circumstances interfered in the situation.
4. Proof that the consumer had the financial capability to pay the bill.
However, in order to be successful, your case has to be made in a meticulous and detailed manner. This is very important!
Fortunately, I have laid out my strategy to remove late payments from your records below.
Here’s how you start.
Watch this video first and learn how to make a case with creditors to challenge late payments on your credit report:
After watching this video, you can understand how to better utilize the steps below:
Keep reading for a more detailed breakdown of the process.
Step 1A: Call Your Creditor – get key dates and facts
For this step, all you do here is find out all the necessary information surrounding the late payment.
Start by finding out when the payment was due and when it was actually made.
For example, your creditor may say you had a payment due of $15 for a $300 balance which was due on June 1st, and the payment was not received until July 8th. Thereby you would have been 38 days late. As a result, they can legally report you as 30 days late on your payment.
After you have gathered this information, you want to see if there is any blame you can pin on the creditor. Find out if the late payment was due to any of the following issues:
1. You missed a payment that was due for an annual fee or membership fee from the creditor.
2. The creditor sent mail to your home, which they told you was actually returned as undeliverable
3. The payment took 2-3 days to process. Due to this, you went over the 30-day mark.
4. They were mailing statements to a misspelled address for you or had your apartment number missing from the address.
5. They were sending statements to an old address, even though you notified them of your new one.
6. You submitted the payment on time, but it bounced because they took down your incorrect bank account # to process the payment.
7. You paid the account off, but it incurred interest charges that were applied as the payment was processing.
8. The minimum payment had increased but the auto pay did not make this adjustment.
9. They misspelled your email address where they send your online statements.
10. You thought you had closed the account, but it incurred a re-occurring charge that was not canceled.
11. You missed the payment due to Coronavirus shut down or related health complications.
You can use any kind of scenario where a case can be made that the late payment incurred was due in part to the creditors’ own negligence.
However, here’s a big mistake that lots of people make:
Telling the bank you did not receive the statement if they had your correct address. If you do this, they will then conduct their own investigation and if the statement was not returned to them as undeliverable, they will deem your dispute frivolous.
Do NOT dispute this issue on the phone unless you find some kind of negligence as described above on the creditor’s part.
In the event you do find a mistake as described above, then ask for a courtesy removal of the late payment.
If they agree to remove the late, ask them to send you a letter stating they are removing the late payment from the credit report.
Clarify that you want the late payment removed from the credit report and that you are not referring to the late payment penalty fee that may have been incurred.
Normally, if the creditor agrees to remove the late payment they will themselves update the account history on the credit report. The likes of Bank of America, Chase, and Wells Fargo often update accounts within a couple of weeks.
Additionally, I’ve found that credit cards like Capital One Synchrony Bank, Macy’s Credit (DSNB), Comenity Bank, American Express are more likely to bow to courtesy requests on the phone if you can argue for partial negligence on the creditor’s part.
On the contrary, big banks and credit card companies like Wells Fargo, US Bank, Barclays, Discover Bank, First Premier, Credit One and Citi are not as easily swayed to remove a late payment. You’ll also find removing a late with auto loan companies like Chrysler Financial, Santander USA, Hyundai Motor Finance very difficult. Either way, if you’re not able to find creditor mistakes, do not get disheartened. Stick with it and move on to the next step.
Step 1B: Identity any extenuating circumstances or errors that led to late payments
If you can prove that a third party mistake or some extenuating circumstances led to the late payment AND the late payment was not due to your financial inability to pay, then you’re in luck.
But beware, creditors will never remove a late payment due to financial hardship or job loss.
However, if you can show documented proof of the extenuating circumstances that led to the late payment along with a copy of a bank statement showing a healthy balance of a few thousand dollars, then creditors may agree to remove late payments under the following circumstances:
1. You were away from home traveling while statements were being sent to your home.
2. You were hospitalized or suffering from emotional trauma.
3. There was a death or emergency in the family.
4. Your bookkeeper or accountant forgot to render payment.
5. You had set up bill pay through your bank, which encountered an error.
6. Your email was hacked where you get e-statements, or the creditor’s emails ended up in spam.
7. Your paper statements and mail was being stolen.
8. You had submitted a double payment the month prior, mistakenly thinking it would cover the next month.
9. Your town was subjected to a natural disaster.
10. The creditors’ online system was not letting you log in.
If you are able to prove a scenario like the one listed above, you will need to ask for the address, fax, or email for the creditor’s “Credit Bureau Department,” to whom you’ll fax this information for review.
Once they receive your information, will review your case and get back to you within 2-4 weeks with their decision.
But you may, “I’ve already tried this and the creditor has simply stonewalled me. What do I do?”
Glad you asked! If you are being stonewalled by your creditor, step 2 is for you.
Step 2- Engage the Creditor’s Executive Resolutions Department or Credit Bureau Department:
If your first correspondence or call has not worked, then that means you are likely in for the long haul.
The next phase here would be to go up the chain of command.
A) Engaging Executive Resolutions Department:
Macy’s, Barclays, Synchrony, Discover, Bank of America, and Capital One all have executive resolution departments.
If they don’t allow you to speak to the Executive Resolutions Department, then mail your complaint to their corporate office by certified mail, attention to their CEO.
Once you have sent the letter, it normally takes around 30 or so to get a response.
B) Lodging a Consumer Financial Protection Bureau Complaint:
At this stage, you can get the different regulatory agencies involved like the Consumer Financial Protection Bureau (CFPB). Do this by lodging a complaint against the creditor. If it’s a credit union you’re dealing with then you’ll need to file a complaint with the National Credit Union Association. Or here if it’s an education-related debt.
Now, if the late payment did not occur due to the creditor’s negligence or fault, then the complaint cannot be made under the premise that the creditor acted illegally and violated your rights under the FCRA.
However, you can argue that despite the reasonable case that you’ve made, the creditor is acting “unreasonably.”
The CFPB will investigate your complaint and forward it to the creditor for a response.
What happens next? The creditors usually respond within 15 days, and if the creditor does not respond favorably, the CFPB allows you to submit your feedback.
However, if you’re lucky, the creditor responds and states they agree to remove the late payment. In this case, they will update your credit report within 30 days.
Now, if your case is not strong enough, it is likely that they deny your request.
Unfortunately, creditors often can brush aside such requests and stick to their position.
In my experience, large banks such as Bank of America, American Express, Santander, Citibank, and GM Financial are not swayed even by complaints to remove a small 30-day late payment.
For these creditors very often legal action is required. That is why I have devised and utilized Step 3 with tremendous success.
Step 3 – Filing a small claims lawsuit against the creditor
Finally, if the first three steps do not yield results, I often help my clients file a small claims suit.
Here’s what’s great about this; I have seen many judges rule in a consumer’s favor if they can prove wrongdoing by the creditors.
For this, extensive research of your state’s civil code is needed, to see what violations were committed pertaining to credit reporting, breach of contract, or unfair business practices.
That’s not all…Small claims court also requires consumers to show monetary damages. Proof of monetary damages could include documentation that a consumer was turned down for credit or received unfavorable financing terms due to the specific late payment.
But make no mistake, simply filing a suit will not make the creditor buckle. The case has to be strong and well documented.
What you may find surprising is, even in the event the creditor does not show up to court, the judge will still look at the merits of the case and rule accordingly.
As a result of the complexities involved with filing and winning a small claims case to erase your late payment, I normally recommend hiring an experienced professional if you are going to go down this path.
While late payments can be very damaging to your credit score for many years after you incur the penalty, there are specific actions that you can take in order to remove these late payments from your record.
With the right approach and a measure of persistency, it is possible to remove the late payments and raise your score.
However, some cases require professional help. Over the last 15 years, I have helped my clients remove hundreds of late payments from their records, restoring their credit scores in the process.