Late payments can cause significant damage to your credit score. For Chicagoans, whether you’re applying for a mortgage, car loan, or simply trying to maintain good financial standing, an incorrect late payment on your credit report can be more than just an inconvenience—it can seriously affect your financial future. Thankfully, with the right approach and persistence, you can remove inaccurate late payments from your report. Here’s what you need to know to address this problem and protect your credit score.
Why Late Payments Matter
Your payment history is one of the most critical factors in calculating your credit score. In fact, it accounts for 35% of your overall score. A single late payment can lower your credit score by dozens of points, which could affect your ability to get loans, secure favorable interest rates, or even rent an apartment. If you’re applying for a mortgage or a business loan, an incorrect late payment could be the reason you get denied.
How Incorrect Late Payments Appear on Credit Reports
Mistakes can happen for a variety of reasons. Sometimes they result from clerical errors by lenders or credit reporting agencies. In other cases, your payment could be applied late by the creditor, even though you paid on time. Misreporting can also occur due to technical issues, such as system errors that incorrectly mark payments as late.
Here are a few ways incorrect late payments may end up on your credit report:
- Processing Delays: If your creditor fails to process your payment in a timely manner, it could be marked late.
- Account Confusion: If you have multiple accounts with the same creditor, payments may be misapplied to the wrong account, leading to an incorrect report of delinquency.
- Credit Bureau Errors: Sometimes, the credit reporting agencies—Equifax, Experian, and TransUnion—receive incorrect information from creditors or fail to update your report after resolving a dispute.
- Identity Theft: In some cases, fraudulent accounts opened in your name might show up with late payments on your report. If you’ve been a victim of identity theft, it’s essential to address this issue as quickly as possible.
The Process of Removing Incorrect Late Payments
While it can feel frustrating to see an inaccurate late payment listed on your credit report, the good news is that you have rights under the Fair Credit Reporting Act (FCRA) to dispute incorrect information. The key is to act quickly and follow the proper steps.
Step 1: Obtain Your Credit Reports
The first step in dealing with an incorrect late payment is to get a copy of your credit reports from all three major credit bureaus—Equifax, Experian, and TransUnion. You can request these for free once a year through AnnualCreditReport.com. Review each report carefully to ensure that the late payment error appears on all reports (sometimes, it may only appear on one).
Step 2: Verify the Late Payment
Before disputing the late payment, double-check your records to ensure that it is indeed incorrect. Review your bank statements, payment receipts, and any communication you’ve had with your creditor. If you discover that the late payment is valid, it will likely remain on your report for seven years. However, if you can prove that the payment was on time, you can take steps to have it removed.
Step 3: File a Dispute with the Credit Bureaus
Once you’ve confirmed that the late payment is an error, the next step is to file a dispute with the credit bureaus. Each bureau allows you to file a dispute online, by mail, or over the phone. You will need to provide details about the incorrect information, including:
- The account in question
- The date of the late payment
- Supporting documentation (e.g., payment receipts or bank statements)
The credit bureau has 30 days to investigate your dispute. If the bureau finds that the information is incorrect, they will remove the late payment from your report.
Step 4: Contact the Creditor Directly
In addition to filing a dispute with the credit bureaus, it’s also a good idea to contact the creditor who reported the late payment. Sometimes, working directly with the creditor can expedite the process, especially if they acknowledge the error and are willing to correct it. Be sure to provide the creditor with all necessary documentation to prove that the payment was made on time.
If the creditor agrees that the late payment was reported in error, they are required to notify the credit bureaus and correct the information. Be sure to follow up with both the creditor and the credit bureaus to ensure the issue has been resolved.
Step 5: Keep Records of Your Correspondence
Throughout the dispute process, keep a detailed record of all communications, including emails, letters, and phone calls. Make copies of any documents you submit to the credit bureaus or creditors. This documentation can serve as evidence in case you need to escalate the dispute or seek legal assistance.
How Long Will It Take to Remove an Incorrect Late Payment?
The process of removing an incorrect late payment can take anywhere from 30 to 90 days, depending on the credit bureau’s investigation and the responsiveness of the creditor. In some cases, errors can be resolved quickly, while more complex disputes may take longer. During this time, it’s essential to monitor your credit reports to ensure that the late payment has been removed and no further errors have been introduced.
How to Prevent Future Credit Report Errors
While some credit report errors are beyond your control, there are steps you can take to reduce the likelihood of incorrect late payments appearing on your report:
- Monitor Your Credit Regularly: Keep a close eye on your credit report and financial statements to catch errors early. You can use credit monitoring services that alert you to changes on your report.
- Set Up Payment Alerts: Many banks and credit card companies offer payment alerts that remind you of upcoming due dates, helping you avoid missed or late payments.
- Make Payments Early: Whenever possible, try to make payments several days before the due date to allow for any processing delays that could result in a late payment.
Consult a Credit Report Lawyer for Help
Incorrect late payments on your credit report can damage your financial standing, but you don’t have to navigate the process alone. By taking the proper steps to dispute the error and monitoring your credit regularly, you can protect your credit score and prevent further issues. If you encounter difficulties or need assistance, the experienced team at Cook Law, LLC is here to help. As trusted credit report lawyers in Chicago, we are dedicated to helping clients resolve credit report disputes and protect their financial well-being. Contact us today for guidance and personalized support.