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Consumer credit reports contain a wealth of information about how you've managed your relationships with lenders and other service providers. If you've always paid your bills on time, you probably have no late payments on your credit reports—and your credit scores will likely reflect that responsible credit behavior.
A record of late payments, however, can have a serious negative effect on your credit. That's why some consumers hire credit repair companies and pay them hefty fees to dispute their late payments in an attempt to have them removed. What you should know, however, is that accurate late payments cannot be removed from credit reports.
The good news? If you find inaccurate late payments on your credit reports, you can dispute those late payments on your own at no cost. Read on to find out how to dispute inaccurate late payments.
Should I Hire a Credit Repair Company to Remove Late Payments?
Credit repair companies cannot have accurately reported late payments deleted from your credit reports. If a late payment was reported correctly to one of the three main credit bureaus (Experian, TransUnion and Equifax), that late payment will not be removed.
Credit repair companies don't have any backdoor access to the credit bureaus or unique abilities to remove late payments. If you choose to hire a credit repair company, which can cost hundreds or thousands of dollars, be aware that they cannot do anything to remove information from credit reports that you can't do yourself for free.
Generally speaking, the only reason a credit reporting agency or a data furnisher, such as a bank, would remove a late payment from your credit report is that it is either incorrect or has reached its credit reporting time limit.
Before you pay a credit repair company to attempt to have your late payments removed, ask yourself a few questions:
- Are the late payments accurate?
- Has seven years passed since the date of the late payment?
- Does my lender have a record of these late payments?
If you answered "yes" to these questions, then it's unlikely you'll be able to have the late payments removed, whether you hire a credit repair company or attempt to do it yourself.
How Long Do Late Payments Stay on Your Credit Report?
Late payments can remain on your credit reports for up to seven years from the date of the delinquency, according to the Fair Credit Reporting Act (FCRA). If the account with the late payment remains open, just the late payment will be removed after this time period. If the account became late, was never brought current and subsequently was charged off as a loss and sold to a collection agency, all of the late payments, the charged-off account and the collection will be deleted seven years from the date of the first late payment. If you have paid off and closed the account, the late payment will be removed from your credit report seven years after it was first reported, but the account itself will remain 10 years from the closed date.
Open accounts that are in good standing and include no late payments may stay on your credit report indefinitely, depending on the individual credit bureau's policy. Experian, for example, will remove positive accounts up to 10 years after the account was closed. That means your credit history benefits from your clean payment record: It will reflect your positive payment history for an extra three years over accounts that have late payments.
How to Dispute Inaccurate Late Payments Yourself
The FCRA gives you the right to challenge or "dispute" information on your credit reports that you believe is incorrect. Unlike hiring a credit repair company, disputing information on your own is free.
If you believe your credit reports hold incorrect information, late payments or otherwise, you can file a dispute with each of the credit bureaus or contact the company that furnished the allegedly incorrect information and ask them to have the information removed.
If you dispute credit report information with the credit bureaus, they will investigate your claim and then remove, update or leave the information on your credit report depending on the outcome of the investigation.
To dispute a late payment on your Experian credit report, go to the Experian Dispute Center.
The Bottom Line
If you're tempted to hire a credit repair company to dispute late payments on your behalf, keep in mind that their fees can run into the hundreds or thousands of dollars. Credit repair companies are also not legally allowed to guarantee that they can have information from your credit reports deleted. And if the late payments are accurate, they will not be removed by the credit repair company or anyone else.