Education Center

Late payments can have a profound impact on your overall credit health.

But the ramifications can extend far beyond having to pay a late fee or penalty APR.
Your payment history is the single most important factor that makes up your FICO score, which means that even a one-time payment made more than 30 days late can cause your score to plummet, even if you have been relatively responsible otherwise. With that in mind, you should strive to pay all your bills ahead of time or on time with no exceptions.

Ask the lender to remove it with a letter of goodwill adjustment

This is an easy way to remove a late payment from your credit report. In some cases, creditors are willing to make a goodwill adjustment if your payment history has been good or if you have a good relationship with them.

Check your credit reports

Regularly reviewing your credit reports from the three major consumer credit bureaus (Equifax, Experian, and TransUnion) could help you detect that something is wrong, such as a mistakenly reported late payment.

A late payment is commonly associated with a credit account. Depending on which credit bureau provides the credit report with the late payment listed, it may be highlighted in some way (for example, with a different symbol or code than what you see for payments on time). And depending on the credit bureau, their reports can also indicate how late the payment was.

Because your credit reports may not be identical, it is important to check your reports from the three major consumer credit bureaus.

Look for wrong or old late payments

If you see a late payment associated with one of your accounts, please review it carefully. There are a number of possibilities for making mistakes. Here are some.

Paid the bill on time, but was reported as late anyway
If you see a late payment but think you paid on time, it could be a mistake. In this case, try to verify that, in fact, you paid the bill on time. You can do this by reviewing the account statements that you used to pay the invoice and the account that shows a late payment, or by checking if you received a payment confirmation.

Ways to eliminate inaccurate late payments

It is not uncommon to find inaccurate information on your credit report. If you find a late payment reported in error, you have the right under the Fair Credit Reporting Act (FCRA) to ask the credit reporting agencies to verify it and, if it is found to be in error, remove it. There are a few different ways to do this.

Dispute the mistake

If you find an old or incorrect late payment on one of your credit reports, you can file a dispute with the credit bureau that issues the report. You can also dispute the error with the creditor who sent the information to the office, such as the lender, the credit card issuer, or the collection agency.

If you dispute the incorrect late payment with your creditor, they generally have 30 days to investigate. If the creditor supports the reported late payment, they will not delete or update the information. But if you accept that the information is incorrect, the creditor has to tell the credit bureau to update or remove it. The creditor must also notify all credit bureaus to which it sent the information so that they can update their records.

If you are directly disputing with a credit bureau, you should file a dispute with each bureau that has a credit report that contains incorrect or outdated information. An agency generally has 30 days after receiving your dispute to investigate your claim.

The “letter of goodwill”

The first suggestion you may hear is to write a letter to the creditor explaining why you were unable to make your payment on time. This is often called a letter of goodwill. But creditors are required to provide accurate information to the credit bureaus, so there is no guarantee that they will update your account.

If you made a late payment and you catch it before it shows up on your credit reports, try calling your issuer as soon as possible. You may be able to work it out with your issuer before proceeding, especially if this is the first time you haven’t made a payment.

“Pay to delete”

Another method is called “pay to delete.” Debt collectors often offer pay-for-disposal services that promise to remove a collection account from your credit reports if you cancel the account.

We do not recommend following this route. Creditors must provide accurate information, so they are not likely to agree to remove negative information from the account unless the information is incorrect. You can save the money and dispute the wrong information yourself.

Also, a pay-per-disposal agreement with a collection agency could, in the best case scenario, remove the paid collections account from your reports, not the original account or late payments.