In today’s world, having a negative credit report makes it challenging to carry on with your daily endeavors. Multiple organizations utilize your credit information as a prerequisite for engaging in any form of dealings with you or whether you are eligible to purchase their services.
In order to wade through the financial waters smoothly, the burden to uphold a positive credit listing is always weighing heavily on most, if not all of us.
The downside of having a negative credit includes the inability to request for loans. Most creditors will verify one’s credit history before they issue out loans. Another disadvantage is that you may be unable to acquire assets or even rent out property.
As such, people are always on the quest to improve their negative credit history. This is where credit repair comes in.
What Is Credit Repair?
Credit repair is a process which enhances your credit report. It is advisable to seek assistance from an expert when you want to reverse your credit report. You can outsource such services, but at a fee. Needless to say, other people prefer to do it on their own.
Credit repair is considered an ongoing process and consists of various steps. These include:
- Evaluation of your credit score.
- Handling any financial disputes which may have caused you to have a negative credit
- Coming up with counteractive strategies which will propel you towards a positive credit score. For example, paying off any lingering debts, developing sensible spending habits which will ensure that your credit card balance is never on the negative side as well as avoiding late payments.
Late Payments? What Does That Mean?
Late payments serve as one of the major causes for having a negative credit. This payment can come in form of the amount imposed on you by your credit card provider whenever you fail to have the minimum amount in your card on a monthly basis.
A late payment can also be defined as an amount of money paid after the due date or payment period elapses for any service. It is considered a late payment not only because it is past due but also due to the fact that it has been paid after a specific grace period. Normally, service providers may extend payments for some time, for example 30 days after the actual payment due date.
However, some people may fail to pay within the extended time. This is what is considered to be a late payment. In the credit world, failing to pay after the grace period elapses earns you a spot in the negative credit list. You will be blacklisted. On top of that, prepare to pay an additional late payment fee.
The good thing is that all is not lost. The secret to avoiding being blacklisted is to acknowledge that you are in a crisis. Inform your creditors in advance once you foresee that such a scenario is likely to happen. Never run away from your creditors. Why should you run away now, yet they were there for you when you needed that quick loan?
Communication is crucial. In addition to that, present a formal letter to your creditors explaining why you have a late payment. Have supporting documents to verify your story. Credit companies operate on policies which protect both the company and you, the client.
As such, they should not deny you your freedom of expression. Once you do that, your late payments are unlikely to be included in your credit report.
Late payments give a negative impression regarding your financial image. A service provider may perceive you to be irresponsible once you become notorious for making late payments.
Causes Of A Late Payment
You may try to justify your late payments for various reasons. Maybe you had not anticipated that you would be in a financial crisis which caused you to have late payments in the first place. It is understandable. So, what are the common causes of late payments? Read below to find out.
Loss of Livelihood
No one can foresee what will happen in future. An unexpected termination of work can create an adverse financial crisis, especially if you used to service your loans from your monthly salary. Suddenly, you are unable to cater for those monthly credit payments or car loan and you end up in a fix with your creditors.
Physical And Mental Incapacitation Due To Injuries or Ailments.
People find themselves in unfortunate circumstances such as having a terminal illness or permanent body injuries from an accident. If you had taken loans or had a credit card, this can result to late payments. At this point, a caregiver can assist by enlisting you for legal expertise on your financial predicament.
We live in a world of variety. Not all that glitters is gold. Not everyone in this world has good intentions in life. Some people just purpose to make it in life through the path of least resistance. They devise cunning methods which they use to acquire assets by stealing from others. Con artists and fraudsters can live off loans and credit cards which they fail to pay for, resulting in late payments.
Withholding Of Payments Due To Poor Service.
Sometimes, you may order for certain services only to be disappointed by the outcome. If you had not paid upfront, you can choose to withhold the payment as you seek solutions from the service provider. This can drag for some time, making you susceptible for a late payment.
In some cases, a late payment can arise due to certain protocols that have to be observed before payments are made. For instance, some clients may fail to pay on time as a result of waiting for authorization from a signatory. Funds cannot be released or a deposit slip cannot be banked without such authorization. Such bureaucracies create late payments.
Disagreements may arise on payments thus causing a delay. The parties involved may revoke the invoiced amount claiming that it is an overcharge or the terms and conditions of the service are not at par with the charges. Such disputes have to be resolved and can lead to late payments.
Sometimes, the fault lies with the creditors. There are instances where you may be charged with late payments yet you had paid on time. This can happen when your creditor fails to update the system which indicates your monthly contributions. In this case, it is up to them to rectify that mistake and clear your name.
As you can see, not all late payments are caused by defrauders. Some have genuine causes which require solutions. Unless you have sinister motives, you should always feel free to discuss with your creditor why you are late on payments.
Is Credit Repair Effective For Removing Late Payments From A Credit Report?
This question is regularly asked by credit defaulters as they seek to clear their names from negative credit listings. Late payments can be removed from your credit report as you go through the process of credit repair.
This is achieved by establishing the real cause of the late payments. We have already looked at the causes above. At this point, both you and your creditor should then seek to resolve the matter by looking at all possible solutions for eradicating the late payments.
There are several ways you can employ to remove the late payment listings from your credit report. Let us delve into them.
How To Remove Late Payments Through Credit Repair
In case of an accurate late payment, the best way to get rid of it is to inform your creditor in person. Make contacts with them and explain your situation. This simple step can earn you the freedom from being blacklisted.
Submit A Goodwill Letter
As earlier stated, there is an existing relationship between you and your creditor. Sometimes a simple request can go a long way. Make a request to the creditor to erase the late payment from your credit score. It could be that you may have gone through an unfortunate event which rendered you financially inept.
A goodwill letter is a way of seeking empathy from your creditor. As such, you should ensure that you use courtesy in your wordings. Use polite language as this shows that you have owned up to the late payment and you do not desire to repeat the mistake in future.
It is important to note that the outcome may be favorable or unfavorable. However, make sure that after submitting the letter, you allow the creditor to do their part. Do not push them to concur with your request. Keep following up on the progress.
Goodwill letters are favorable to those who have a positive history on payments. If you are prone to late payments, chances are that the goodwill letter may not do the trick for you.
It is also advisable to make copies for filing just in case setbacks arise. Some creditors may claim that you never submitted any letter.
Disputing With Your Creditor
There are instances where the listed late payment is due to an error. It is important to always go through your credit documents and reports carefully. This can highlight any errors made. Simple mistakes such as a name being misspelt or a wrong date of payment can create a late payment. Once you verify the error, you have a right to raise a dispute with your creditor who will then have to correct and erase you from the list. What matters is the validity of your dispute. It also pays to have evidence to support your dispute. Keep any document you use as a client with your creditor.
Sometimes, things may take a turn for the worse and you encounter denial from your creditor even after the goodwill and the dispute. At this point, you can attempt the following two methods which are guaranteed to push through.
Raise A Dispute At The Credit Bureau
In the United States, there are three major bodies responsible for credit reports. These are the TransUnion, Equifax and Experian. Any responsible citizen ought to be cognizant of the roles these bureaus play.
Anytime you want to look at your credit report, credit score and credit status, any of the three bureaus is mandated to provide you with the information.
In case you have an erroneous late payment and your creditor is not bulging, you have a right to raise a dispute with the bureau. The bureau should assist you by evaluating the validity of your dispute. They will communicate with your creditor so as to look for effective solutions.
In addition, the bureau will set a timeline where your creditor should rectify the record. Normally they are given 30 days. If there is no change, the bureau itself will amend your credit report.
Inform the Consumer Financial Protection Bureau
Another major body that can protect you as a consumer is the Consumer Financial Protection Bureau. This sovereign body was specifically formed to protect consumers from unfair treatment from financial or credit institutions across the country.
It is mandated to supervise these institutions to prevent consumers from being taken advantage of. Also, it is tasked with creating awareness and educating consumers on how such institutions operate by providing educative resources.
This gives consumers a chance to exercise their rights as well as equip them with knowledge that makes them responsible consumers. When worse comes to worst, this is where you ought to go to raise a complaint about the late payment listed on your credit report and seek for it to be erased.
This bureau ensures that a response is obtained in the shortest time possible, usually within two weeks. They have a step-by-step process that is used from the time a complaint is raised. The good thing with this bureau is that they keep you in close contact throughout the process. Any decision they make is communicated to you promptly. In case they feel your case can be successfully handled elsewhere, they will communicate to you in advance before handing the complaint over.
It is possible to remove your late payments through credit repair. A take away tip from me would be this. As you progress in life, make it your mission to avoid unnecessary financial debacles. Strive to live as financially savvy as possible by making wise choices.
Credit Repair Lawyer Free Consultation
When you need legal help to repair your credit, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506