credit report

A credit score is an important factor in obtaining loans from banks and other lenders. It is a numerical representation of a borrower’s credit responsibility; which lenders pay close attention to. It determines whether borrowers make timely payments or not when their debts are due. For this reason, late payment lowers their credit score. It is always possible to improve credit scores, though.

One of the ways of improving credit score is by making timely payments. Always avoid the temptation to default on payments. The credit system involves two parties, the lender and the borrower. Late payments reflect on the credit report when the lender reports that the borrower’s payment is late. This report might not always be accurate as the lender can mistakenly report a late payment when it was paid early.

This error can be sorted out by filing a disputing stating that the credit report contains a mistake and demanding its removal or correction. Lenders are legally obligated to correct errors so as not to violate the Fair Credit Reporting Act. This act was created to foster the fairness and accuracy of the information contained in the reports of consumer reporting agencies. Fixing the error by the credit issuer might take some time but can be accelerated with the use of rapid rescoring. Still, the system puts the lender at an advantage because of the high risk the loan represents to the lender as compared to the borrower according to

Several steps can be taken to remove a late payment from the borrower’s credit history. The method selected depends on the borrower’s credit history and the form of relationship with the lenders.

Payment history is a massive factor in the FICO scoring system with a 35% weight. Payments less than 30 days late are unlikely to appear in the borrower’s credit report. If it exceeds 30 days, however, it becomes categorized (that is, 30 days, 60 days, 90 days, and so on). This categorization continues until it results in a charge-off as determined by the lender. Paying a few days late might not affect a credit score but the borrower might have to pay penalties to the lender, depending on the contract and if the borrower is at risk of having his account closed.

Late payment reduces a credit score within a month or less. In fact, a recent late payment can cause as much as a 90-110 points drop on the borrower’s FICO credit score. This considerable drop is one of the reasons why late payments should be prevented or removed from the borrower’s credit score. Here are some of the steps that can be taken to remove late payments from a borrower’s credit report.


The first and easiest step is by simply asking the lender to remove the late payment. This is a very simple approach, but often yields good outcomes when done nicely. This can be completed in two ways: the first is through a telephone conversation. The borrower can politely ask the lender or someone with authority in the lending company to solve the report discrepancies. Secondly, it can also be done through the request of a goodwill adjustment. This takes the form of a letter (called the goodwill letter) written by the borrower to the credit issuer or lender to explain the situation.

This form of request is only a worthwhile alternative when there is a good payment history between the lender and the borrower. The letter should explain why the late payment should be removed. Proof can be included to support the borrower’s claims and to make a stronger case. The lenders are not legally required to do so, but they might be willing to grant your request for any of the following reasons.

  1. The late payment was a result of hardship or an unexpected circumstance, such as hospitalization or a natural disaster.
  2. The late payment was not the borrower’s fault, and there are evidence and documents to support this claim.
  3. The borrower can offer something in return. Lenders might be tempted to remove the late payment when they are offered a substantial deal. It might be that the borrower wants to pay all the outstanding debts.
  4. The late payment is a one-off, that is, the borrower usually pays on time, and the late payment likely will not repeat itself.

These situations sometimes will lead lenders to remove the late payment. Other times, they are not removed, and the late payment remains in the credit history.


This is another approach that can be used to remove late payments from a credit report. The borrower makes an offer to the lender and in return, the lender removes the late payment from the report. A borrower can agree to automatic payments so that future payments will be paid when due. This type of payment is typically a “win-win” situation for everybody. The lender or creditor always gets the money on time, and the borrower’s account is updated with no late payment in the record.


This option requires the borrower to pay off all the accumulated debts. The late payment will, however, remain in the credit history for seven years. After this period, it is taken off the records.


The complexity of some financial situations necessitates the need for a professional. An attorney can guide the borrower on how to go about this while being in compliance with federal and state laws. A credit repair company (one that makes it their duty to repair and improve the credit profile of its clients) can also be utilized. Before signing any agreement with a credit repair company, the borrower has to be confident in the company’s experience and reputation, however, which involves checking a consumer protection bureau like the BBB. The borrower should also take note of all the potential fees that will be charged for the services before patronizing the company.


Even with the late payments, a borrower can still get loans. The responsibility, however, is on the borrower not to work with predatory lenders who charge exorbitant fees and interest rates. This borrowed money can be used to prevent late payments so as to maintain a good credit reputation.


For the borrower to improve or rebuild the credit score, late payments have to be avoided in the future. The ways outlined in this article can help.