A late payment is a credit bill payment that is made overdue. Late payments on credit bill not only incur late fees, they’re bad for the credit score in general. If you’re one of those people concerned with your credit score, you should avoid making a late payment because credit repair companies cannot get accurately reported late-payments removed from your credit report that reaches one of the credit bureaus, i.e Experian, TransUnion and Equifax. Inaccurately reported late-payments however, are a different story.
Why Credit Repair Companies Cannot Remove Accurately Reported Late Payments
The reason credit repair companies cannot remove your late payments is rather straightforward, it’s not possible because it’s not legal. Credit repair companies do not have magic powers to resolve such problems. You should know what they can and cannot do before spending hundreds or thousands of dollars hiring them.
There’s only three ways a late payment can be removed. The first way it can be removed is if it was inaccurately reported. The second way is if it has reached the credit reporting time limit. The third is if the lender does not keep record of these late payments.
How Long Do Late Payments Stay on Your Credit Report
The amount of time a late payment can stay on your credit report is 7 years. The time limit for which negative information can stay on your credit report is ruled by a federal law called Fair Credit Reporting Act (FCRA) and it sets the term limit to 7 years.
Only the late payment will be removed after 7 years If the account with the associated late payment remains open. If on the other hand, the account remains late, was not brought current, subsequently was written off as a loss and sold to a debt collection agency, all of the accurately reported late payments, the written-off account and the collection would stand deleted seven years from the date of the first late payment. If you have paid off any outstanding credit card debt and closed the account, the late payment will be erased from your credit report seven years after it was first reported, but the account will remain 10 years from the closing date.
Open accounts that have good credit health and carry the marks of no late payments, may stay on your credit report indefinitely, but that would heavily depend on the particular credit bureau’s policy.
How to Dispute inaccurately Reported Late Payments
The Fair Credit Reporting Act gives you the right to challenge or hold in dispute information on your credit report that you believe is factually incorrect. disputing information on your own is free but if you think you cannot handle the negotiations, hiring a credit repairer would be a better bet.
If you think your credit report holds factually incorrect information, late payments or not, you can file for a dispute with the concerned credit bureaus or contact the company that passed-on the incorrect information and ask them to have the information corrected.
If you dispute credit report information with credit bureaus, they’d investigate your claims and arguments and then either remove, modify or leave the information on your credit report depending on the outcome of their inquiry.
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