Last Updated on
I wrote this comprehensive guide for those who can’t afford my paid legal services to remove recent late payments.
I’m presenting an actionable 3-step plan to remove recent 30 day lates, the same strategy applies for 60, 90 to 180 day late payments.
What’s most important to know is…
Recent lates NEVER come off with credit bureau disputes or sample goodwill letters (I’ll explain why later). By recent, I mean lates ranging from today to 4 years ago.
Over the last 15 years I’ve perfected this method and removed hundreds of missed pays. So you don’t have to do any guess work.
Because lets face it
Trying to remove a recent late pay can drive you insane:
— creditors give you the run around and are extremely unhelpful.
— you 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”
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
Before we get into how to fix late payment histories
Here’s proof this process works…
Proof this process works.. check out these 4 deletion letters:
These are 30 day, 60 day and 90 day late payment deletions that I achieved with Macys, Barclays card, Capital One and Chase credit cards for my clients just this year…
Let me clear up some misconceptions about missed payments first
How does a 30, 60, or 90 day late pay affect the credit score?
If you’ve got a good credit score, a new deliquent payment will affect you far more negatively than someone with a poor score.
Here are the facts…
For a good score of 680 plus, a new late payment is going to sting bad. A 30 day late may drop that score 80 odd points, whereas a 60 to 90 day late will drop the Fico score 80 to 120 points !
You may want to know how long will the credit score recover after the late payment?
The saddest part is
Your score will only increase 1-2 points per month. There will be a slight increase once you bring a deliquent account to current, but after that it will be an extremely slow recovery.
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 for ?
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.
Even paying off or closing the account will not remove the late payment any sooner. The so-called ‘pay for deletes’ only work with collection accounts.
But here’s what you may need to ask yourself first …
NEVER dispute a recent late payments with the credit bureaus
Lots of credit repair say “experts” encourage you to dispute the late payment with the credit bureau and that is supposed to miraculously get you results “if the creditor does not respond back within 30 days.”
These are the biggest mistakes you can make….
Today, the credit bureaus have modernized and switched to automatic dispute verifications where they correspond to the creditor via their data exchange interface, E-Oscar.
Hence unlike the older days no phone calls or hand written communication is exchanged between bureaus and creditors, this interface verifies millions of accounts that are disputed every month by consumers in a matter of minutes, by cross referencing databases of the bureaus and creditors.
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 are also effective for questionable older collection accounts and charge-offs if you utilize the right strategy, But just not for late payments that really mater, like recent late payments or late payments on open accounts.
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.
Can a late payment be removed if caused by Covid19 pandemic & shelter in place?
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 fall out from the corona virus has made lenders make exceptions for those who suffered loss of income or health complications.
First step would be to simply call the creditor and see if they’ll be able to issue a courtesy remove of the late payment. They may ask you to prove your loss of income or health complications. However lates for February 2020 or prior will not qualify for goodwill deletion under the Covid19 virus situation, in which case you’ll need professional help.
Why creditors DO NOT want to help you fix your payment history?
Now comes the case of goodwill letters, they worked to some extent 10-15 years ago.
But the sad part is…
Every self-proclaimed “credit expert” and even credit repair companies still claims you achieve a late payment forgiveness this way.
As a result..
Many folks have wasted their time sending courtesy removal requests to creditors, while others 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 been sued by one of the government regulating agencies.
The bottom line ….
Goodwill letters do not work, and banks own websites say so. in fact they make your chances of removing a late worse. (Only exception here is if the late occurred exactly during the Covid-19 pandemic).
Want more proof? check this out:
Here’s Bank of America’s own website stating that goodwill letters will not work.
Bank of America’s 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. However, there is one exception here if you were affected by the Corona Virus pandemic.
Why creditors DO NOT want to help you fix your payment history?
So 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 in spite of them being late, then this can construed as the company trying to conceal the defaults from shareholders. And this may lead to a heavy regulatory fine.
Unless you’re a victim of fraud and or identity theft, the only way to remove recent late payment from the credit report is by getting the original creditor to agree to remove the late payment.
Credit Bureau disputes will not work for late payments unless the late occurred over 4 years ago on 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, Cap1, to remove 30,60 and even 90 late payments by providing them a chronological letter, backed with proof, which explains the following:
1. Why was the late payment occurred?
2. Why was the consumer not aware the bill was due?
3. What extraneous circumstances interfered ?
4. How consumer had the financial capability to pay ?
But this has to be a meticulously and detailed case to make. Here’s how you start.
Watch this video first and learn how to make a case with creditors to challenge late payments:
After watching this video, you can understand how to better utilize the steps below:
Step 1A: Call Creditor- getting key dates and facts
All you do here is find out all the necessary information surrounding the late payment. Start with findings out when the payment was due and when was it made?
Eg. The may say, you had a payment due of $15, for a $300 balance, that was due on June 1st , and the payment was not received until July 8th. Thereby making you 38 days late. So they can legally report you as 30 days late.
First you want to start with seeing if there is any blame you can pin on the creditor. So find out if the lates were due to any of the following issues:
1. You missed a payment that was due to for an annual fee or membership fee from the creditor.
2. The creditor sent mail to your home, which they tell 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 misspelt address for you or had an apartment number missing
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 a payment that bounced.
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 misspelt your email where online statements were to be sent.
10. You thought you had closed the account, but it incurred a re-occurring charge that was not cancelled.
11. Missed payment due to Corona virus shut down or related health complications.
You can use any kind of scenario, where there is a case that the late payment incurred was in part due to the creditors own negligence.
However, here’s a big mistake…
Telling the bank you did not receive the statement, if they had your correct address, 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 this issue on the phone unless you find some kind of negligence as described above on the creditors part.
In the event you do find a mistake, 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 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 courtesy request on the phone if you can argue for part negligence on the creditor’s part.
On the contrary, big banks and credit card companies, like Capital One, US Bank, Chase, Barclays, Citi are not as easily swayed to remove a late payment. Either way, if you’re not able to find creditor mistakes, do not get disheartened and move on to the next step.
Step 1B: Identity any extraneous circumstances or errors that led to late payments
If you can prove that a third party mistake or some extraneous circumstances led to the late payment AND the late payment was not due to your financial inability to pay, then you’re in luck.
Creditors will never remove a late payment due to financial hardship or job loss
If you can show documented proof the of what happened, 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 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 setup 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. Creditors online system was not letting you login.
Now if you are able to prove a scenario like this then 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 to for review.
They will review the information and get back to you within 2-4 weeks with their decision.
But you may say…..
I’ve already tried this and the creditor has simply stonewalled me.
What do I do?
Glad you asked… Step 2 is for you….
Step 2- Engage the Creditor’s Executive Resolutions Dept or Credit Bureau Department:
If your first correspondence or call has not worked, then that means you are in for the long haul.
The next phase here would be to talk to go up the chain of command.
A) Engaging Executive Resolutions Department:
Chase, Macy’s, Barclays, Synchrony, Discover, Bank of America, Capital One, all have executive resolution departments. .
If they don’t allow you to speak to the Executive Resolutions, then mail your complaint to their corporate office by certified mail, attention to their CEO.
It normally takes 30 odd days or so to get a response.
B) Lodging Consumer Financial Protection Bureau Complaint:
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. Or here if it’s an education related debt.
If the late payment did not occurred 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 is ….
The creditors usually response within 15 days and if the creditor does not respond favorably, the CFPB allows you submit your feedback.
Now if you’re lucky….
The creditor responds and states they agrees to remove the late payment. In this case, they will update your credit report within 30 days.
It is also likely, if your case is not strong enough, that they deny your request.
Creditors often can brush aside such requests and stick to their position.
In my experience, large banks such as Bank of America, Chase, Ford Credit, Citibank, GM Financial, are not swayed by complaints even 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 Step3 with tremendous success.
Step 3 - 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.
Here’s what’s great about this…
I have seen judges rule in a consumer’s favor who can prove wrongdoing by the creditors.
For this an extensive research of one’s state’s civil code is needed, to see what violations pertaining to credit reporting , breach of contract, unfair business practices and negligence were committed.
That’s not all …
Small claims court also need 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.
So normally I would recommend hiring an experienced professional if it comes down to taking legal action.
The Final Step: Take Action to repair your credit
Now comes the time to figure out what to do about this problem.
From experience I can tell you that the sooner you take action to address a late payment, the better the chances of success.
So here’s what I suggest you do next: