I’ve written this blogpost for the people who cannot afford my paid services and don’t mind going through the trouble of doing this themselves.
For them, I’ve distilled my experience into a 3-step process to remove late payments.
Because lets face it:
Trying to remove recent late payments yourself can drive you insane:
- creditors give you the run around.
- you spend hours on the phone each time you call, only to be disconnected.
- you talk to tons of people who give you conflicting information.
And if you’ve hired a credit repair company or so called “law firm”, chances are:
- you’ve wasted $1000+ without results in upfront fees
- they put in ineffective credit bureau disputes and goodwill requests
- you find yourself at the same place where you started
You’re still here looking for a way to remove late payments.
Here’s a quick overview of the 3-step process:
But first here’s what you should not do:
Do NOT dispute the 30 day late payments with the credit bureaus
This is the biggest mistake you can make. If you go behind the creditor’s back and dispute a recent late payment with the credit bureaus, they will easily verify it. Then when its time for you to deal with the creditor directly, they will hold this credit bureau dispute against. Unfortunately, many credit repair companies, including Lexington Law Firm, who’ve let down their clients time and again, claim if you dispute recent late payments with the credit bureaus (Experian. Equifax and Transunion), the creditors have 30 days to respond back and if they don’t then the late payment would be removed. Unfortunately, this method has been made obsolete by technology.
Today, the credit bureaus have switched to automatic dispute verifications where all the bureaus do is correspond to the creditor via their data exchange interface known as E-Oscar (http://www.e-oscar.org/about-e-oscar.aspx). Hence unlike the older days are no phone calls or written communication that is exchanged, this interface verifies millions of accounts that are disputed every month by consumers in quick fashion.
However, credit bureau disputes do work for questionable older collection accounts and charge-offs if you utilize the right strategy, and also for very old late payments on closed accounts. The just don’t work for recent late payments that are less than 4 years old. I have dealt with numerous creditors over the years, utilized every strategy in the book from engaging the office of the CEO, filing regulatory complaints and filing suits in court and can humbly state I’ve achieved the highest deletion rates for removing recent late payments from credit reports. So let me explain what I’ve discovered over the years:
The Way to Remove a Late Payment:
Step 1: Dispute the 30 Day Late Payment with the Creditor:
Unless you’re a victim of fraud and or identity theft, the only way to remove the recent late payment from the credit report is by getting the original creditor to agree to remove the late payment. The simple first step is to call the creditor and ask for a goodwill removal of the late payment. Simply tell them this was an oversight and you had the funds to pay them. Do NOT tell them you did not receive the statement, as 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 the item with the creditor unless you are sure this was a mistake by the creditor. Simply ask for a goodwill removal of the late. 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 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 Amazon/Synchrony Bank, Macy’s Credit, Gap Store Cards, Nordstroms are more likely to bow to goodwill request. On the contrary, big banks and credit card companies, like Capital One, US Bank are less likely to make goodwill adjustments. Either way, if the goodwill request does not work, do not get disheartened and move on to the next step.
Step 2- Engage the Creditor’s Executive Resolutions Dept or Credit Bureau Department:
If the first call has not worked, then that means you are in for the long haul. The next phase here would be to ask the phone representatives to get you to the company’s ‘Executive Resolution Department’ or their own credit bureau department. Large financial institutions have like Chase, Macy’s, Discover, Bank of America, Capital One, all have both departments you can speak to on the phone. If they don’t allow you to speak to the departments then mail your complaint to their corporate office by certified mail, attention to the CEO. However, you will need to make a solid case and document your argument with proof. Below are the most effective arguments that have led to creditors removing late payments:
A) Arguing External Factors led to the late payment:
Creditors will not remove a late payment if they believe you did not have funds to pay them. So you have to prove to them that you were financially capable of making the payment in time had you been aware of the situation. In other words, the late payment occurred due to ‘unwillful negligence’ and not your lack of capacity to pay.
For instance, if the late payment incurred due to you being out of town, it would be advisable to provide the creditor with proof of your travels and evidence that of sufficient funds in your bank account to make the payment that was due. Likewise other another external factor could be a problem with your bank’s auto payment system, the problem with mail forwarding or personal tragedies that can be proven with documented proof.
B) Proving Creditor Related Mistakes Led to Late payment:
If you believe that the creditor’s negligence led to the late payment, then, by all means, make this case. In order to find possible clues as to where the creditor may have erred, find out what phone #s did the creditor call to alert you of the missed payment and what address were the payment due notices going to. If they have an outdated address, phone # or email where they were trying to contact you, then this can be a good basis for a request to remove the late payment.
C) Natural Disaster Victim or Miltary Service Placement:
If you were involved in a natural disaster or were called up for military duty, then all creditors do allow for the removal of the late payments based on these circumstances. Given that the late payments coincide with the dates of the natural disaster or the military service, you’ll need to provide them the proof of your deployment or proof of the natural disaster affecting the area where you lived.
D) Late Payment Incurred Due to Annual Fee:
In my experience, most creditors, like Capital One, First Premier and American Express do remove the late payment as long as the annual fee amount was the only balance outstanding at the time of the payment. If they don’t agree to remove the late payment that arose from the annual fee, then immediately proceed to the next step of filing a complaint against them.
Step 3 - Filing Regulatory Complaints Against the Creditors
At this stage, you can get the different regulatory agencies involved like the Consumer Financial Protection Bureau (CFPB) and lodge 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.
If the late payment occurred not 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. Since the CFPB tracks complaints against creditors, the creditors are motivated to resolve all complaints.
Normally you can expect a response from the creditors within 15 days and if the creditor does not respond favorably, the CFPB allows you the option to dispute the creditor’s response. If the creditor agrees to remove the late payment, they will forward you confirming through the CFPB website that they are doing so. Hence, the CFPB has provided consumers with an effective tool in dealing with such issues.
In spite of this creditors often can brush aside such requests and stick to their position. Bank of America, Chase, Ford Credit, Citibank, GM Financial, in particular, are very stringent when it comes to removing late payments. For these creditors very often legal action is required.
Final Option - Filing a Small Claims Lawsuit Against the Creditor
Finally, if the first three steps do not yield results, then something I help my clients with is filing a small claims suit. In my experience, judges will rule in your favor if you prove wrongdoing by the creditors and can show monetary damages. Proof of monetary damages could include documentation that you were turned down for credit or received unfavorable financing terms, due to the specific late payment. Simply filing a suit will not make the creditor buckle. The case has to be strong and well documented. 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. So normally I would recommend hiring an experienced professional if it comes down to filing a suit.