How Can I Remove One Late Mortgage Payment From My Records?

Late mortgage payments don’t look good on your credit report, particularly if you’re shopping for a new mortgage and hope to get a competitive interest rate. So if you have a late payment on your record, it’s good to know where you went wrong and what your late mortgage payment forgiveness options are.

Late Payments and Credit Reports

Late mortgage payments typically stay on your credit report for seven years. That’s a long time for a single payment made 30-to-60 days late. You can start by paying off the account. If you’re less than 30 days late, you may even be able to call your lender and get it removed. If you’re over 30 days late, making the payment and the late fee won’t remove it from your credit report. It will likely show up on your credit record because the lender will have reported it.

However, for a late payment that is no more than 60 days late, the credit blemish may not be major, especially if it occurred a while ago and if it’s an isolated incident. If it occurred recently, in the last two years, your credit score will drop temporarily, but after two years, it should no longer damage your credit score.

Late Mortgage Payment Forgiveness

If you want to remove the late payment, it should be because the late payment was an error on the part of the bank or lender or a third party. In this case, you should be able to dispute the late payment and get it removed from your credit report.

To do this, you’ll need to be meticulous in your record keeping. Make sure you get a copy of your FICO credit reports from all three credit reporting agencies: Equifax, Experian and TransUnion. Contact the lender who claims you were late in making your payment so you can dispute it. If your records show you made the payment, provide the lender with this proof that you paid on time. If the lender agrees the reporting of a late payment was their mistake, request a letter on their company letterhead explaining the error. Make sure your account number and the date of the late payments are included in the explanation.

Your lender should also inform the credit reporting agencies. Once the late payment is removed from your credit record, your credit score will automatically improve. Keep copies of your letter to use in case one of the credit reporting agencies doesn’t immediately remove the late payment from your record. Lenders are expected to report incorrect information to the credit reporting agencies so they can update their records.

If You're Late Only Once

If you’ve never had a previous late payment, and you are less than 30-days late making your payment, your credit report shouldn’t suffer too much. A single 30-day late mortgage payment shouldn't damage your chances to buy another house, take out a second mortgage or buy a car. Even if you’re beyond 30-days late, but less than 60-days late, you may get lucky and catch a late payment before it makes it onto your credit report. Call your lender and ask if the lender will remove the 30-day late payment from your record. If you have a valid reason, provide your lender with an explanation. If this satisfies them, they are more likely to remove the late payment from your record if you don’t have a history of late payments.

Don’t Be Habitually Late

The problem with late payments is that if you are habitually late, even within the 30-day window, it can damage your credit rating. If you were habitually late paying bills in the past, but you are now paying your bills on time, explain to a potential lender that you are no longer a credit risk. You will also have to keep on top of your FICO credit scores after two years to see if you are still considered a credit risk.

If you made a payment 90 days or more late, however, you will most likely have to wait up to seven years to get the late payment taken off your credit report. If you don't have further 90-day late payments, and you make payments on time after that, the late payment may drop off your credit report in less than seven years. But count on it being on the report for a while. You may have a harder time getting a loan with favorable terms during this time. Remember, the function of your credit scores is for lenders to assess risk. A low credit score presents a risk to the lender and indicates that you are more likely to make late payments or even default on loans and mortgages.

When You're 120 Days Late

If you make a payment that is 120-days late or more, your debt may be sold to a collection agency. This will not look good on your credit record. Make sure you continue to make your other payments while you work on paying off the late mortgage payment.

Your late payment may go to a third-party collection agency or it may go to an internal collection department. Pay this off immediately, or your home could go into foreclosure. Even if you walk away from your home, your credit score is going to suffer substantially. You will not be able to remove this from your credit record for seven years.

Should You Pay For Removal?

Don’t pay a debt collector who promises to delete a late payment from your credit report. If the information is incorrect, you can dispute it yourself with the same results. If you do owe the debt, and you are trying to erase a 90-day late fee, you must pay off the collection account that you owe. Paying it off may help in some cases, but it won’t remove it from your credit report or improve your scores. Most creditors still report late debts to the credit reporting agencies; something the credit reporting agencies insist on to preserve their reputations. So don’t waste money on paying for removal of the debt; it won't disappear, and your record of late payments will remain. If you see a claim that a late payment will be removed from all your credit reports by paying a fee, be aware that it’s a scam.

Payments Going Forward

If you have a debt that went to collections and you have been able to pay off the debt and extra fees, the best thing to do is to keep paying all your bills on time and not accumulate any more debts that you can’t afford. Set alerts on your phone to pay bills at certain times, or set up automatic payments for your loans and mortgage.

You may have to put off buying a new house or car until your credit score improves, but if you continue to make all your payments on time going forward, you can build a record that shows lenders you are no longer a credit risk.

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