Removing A Closed Account With Late Payments
Your credit score is made up of five factors and payment history is the most important, accounting for 35% of your score. That means even a single late payment can really lower your credit score. We’ll explain when late payments fall off your credit report, if it’s possible to have late payments removed, and ways to improve your credit.
How long late payments are on your credit report
The bad news is how long it takes for late payments to fall off your credit report. It takes seven years even if you pay the past due balance and even if you pay off and close the account.
The good news is that new information pushes those late payments (and other derogatory marks) further and further down your report as it’s added. That means things like on-time payments and reductions in your utilization will become more prominent than those late payments eventually and much more quickly than seven years.
Removing late payments from your credit report
Credit reports can contain errors. You can order a copy of your credit report from each of the three main credit bureaus here. Go through each report and look for late payments and other errors. If you find any, you can dispute them both with the reporting party and the credit bureau.
You’ll need to be able to prove the late payment was recorded in error. This is one reason it’s so important to check your credit card statements regularly. If it’s proven that the late payment or other derogatory remark was reported in error, it must legally be removed from your credit report.
If you did indeed make a late payment, it’s not impossible to have it removed from your credit report but successfully having it removed isn’t very likely. You can call the creditor, explain why your payment was late and ask them to delete the late payment from their records and update the credit bureaus.
Your odds will be improved if you have a legitimate hardship reason for your late payment like hospitalization and if you’ve never made a late payment before and have otherwise been an exemplary customer. You can also put the same information in a letter or email and send it to the creditor.
Both of those solutions are after the fact though. The much better approach is a proactive one. If you know you can’t make a payment on time, call the creditor before the due date and explain the situation. They may be willing to reduce your payment or move your payment date. In some cases, federal student loans for example, you may be able to put your payments into forbearance for a time and resume them when your situation has improved.
Improve your credit score
Seven years is how long before late payments drop off your credit score but there are plenty of ways to improve your credit score in those years. The most important is not to make any more late payments! Set up auto-pay if you struggle to remember your payment dates. Experian Boost can help add additional on-time payments to your credit report, pushing those late payments down faster.
And working with Upwardli will help improve your score too! If you’re new to the U.S. or new to credit, we can help you build your credit score. And a credit score is an essential part of personal finance in this country. Upwardli has also created dozens of resources to help you understand and improve your finances and can connect you with financial service providers who understand the needs of those newly arrived in the country. Upwardli is here for you!
