There are two different sources where negative credit can be disputed — the creditor and the credit reporting agencies. Both sources require two very different strategies.
Credit scores generated by Fair Isaac (Fico) use a mathematical formula which examines your credit report information and puts it into a 3-digit numerical number ranging from 300 to 850.
While it remains a mystery as to exactly what makes up a credit score, we do know 35% of your credit score is determined by your payment history.
Late payments are detrimental to your credit score. If you are repairing your credit, correcting and even deleting late payments will help improve your credit scores. Below are several ways to tackle late payments on your credit reports.
How to dispute late payments with the creditor
Goodwill Letter. Infrequent, rare late payments can be deleted by the original creditor. Write a goodwill letter and request the creditor remove the late payment. Many times creditors, as a gesture of good customer service, will remove late payments, especially if you have been a good customer in the past.
Multiple Late Pays. Multiple late payments can actually work in your advantage. If you have an account with 30, 60, 90 and even 120 late payments and it has not been charged off, offer to bring the account current in exchange for deletion of the late payments.
You have the leverage which is the money your creditor wants. Their alternative would be to charge-off the account. Why not rehabilitate the account and save your credit score. It never hurts to ask but always get all negotiations in writing!
Proof of Payment. A creditor may agree to delete a late payment if you have proof of a timely payment such as a canceled check. Make your request in writing and it may help if you let them know you are trying to obtain a mortgage. Remember to create an urgency to get a positive response.
Identity Theft. Unfortunately identity theft has become a huge problem in today’s Internet savvy world. If you are or have experienced identity theft it may be necessary to obtain police reports and any follow-up information in order to have this information corrected. It may take a little more time to correct these types of errors.
Online Bill Payment. The advent of online bill pay is actually a very good reason for internal investigations with your credit card companies. Online or automatic bill pay can have software glitches or, perhaps the service was offline for maintenance when you attempted your payment.
A payment could have been paid one day but credited up to 2 to 4 days later. Dispute “account paid on time” with the credit bureaus but also contact your creditor and explain the issue and politely request they correct the negative entry with the credit bureaus to reflect “paid/never late.”
Utilize the Fair Credit Billing Act to dispute directly with the creditor if you have “open end” credit accounts and want to dispute fraudulent or unfair credit charges.
How to dispute late payments with the credit reporting agencies
The Never Late Dispute. Disputing a late payment by stating you were never late may result in two outcomes: (1) the CRA will contact the creditor and get verification to confirm the listing or; (2) the CRA will contact the creditor, the creditor may fail to respond within (30) days which results in the listing being converted to a “positive status.”
The Factual Error Dispute. As an alternative look for factual errors you can dispute. Is the account balance, late payment amount, and dates being accurately reported? If not, dispute the errors and request a deletion, not a correction. A deletion of the inaccurate item will immediately raise your credit scores. Are the credit reporting agencies reporting a delinquent amount of zero ($0)? If so, how can you be delinquent for nothing? Request a deletion.
The Charge-Off Dispute. Has the account been charged-off. If so, no late payments should be reporting after an account has been charged-off or closed. This is a factual error you can dispute and request a deletion.
Is the date the account was charged-off or closed correct or being reported at all? Are the dates of the late payments correct? Do not give them the correct information, dispute and ask for a deletion of the listing. Dispute the late pays with the credit reporting agencies. If the dispute is verified, try again in 60 days until you get the result you want.
Settling Accounts
Negotiating a settlement with the creditor can rid you of late payments but settling debt can also ruin your credit score. Unless you negotiate a deletion of the account in its entirety, creditors will report the account as settled and this is a negative entry. Even though the account is considered closed and paid; it will be reported as a settled debt for less than the original obligation. Read more on how to settle debt with the original creditor.
