Late payments can happen to anyone, especially during these times of economic uncertainty and pandemics. Luckily, there are several ways to remove negative items from your credit reports.
As a consumer credit expert and lawyer, my aim to always provide factual value to help the millions of people whose credit has been impacted and how to remove late payments during covid-19 pandemic. People have been late on credit cards, installment loans, auto loans, or mortgages. The CARES ACT has created certain provisions. Will discuss some later on.
So, in this article, I will go over proven strategies I‘ve used to remove countless late payments.
Now, I can imagine prior to the outbreak you had terrific credit, and a recent late payment( due to financial constraints or an oversight made your credit score tragically plummet over a whopping 50-100 points. Thereby effectively ending your chances of getting approved for any kind of reasonably-rate loan.
You’ve done everything right with your credit and here something happens that is absolutely beyond your control. This is time we start freaking out and go into a psychological downward spiral, losing sleep and our emotional well-being.
Ask the lender to remove it with a goodwill adjustment letter
The process is easy: simply write a letter to your creditor explaining why you paid late. Ask them to forgive the late payment and assure them it won’t happen again. If they do agree to forgive the late payment, your creditor will adjust your credit report accordingly.
Creditors don’t always forgive late payments, but it doesn’t hurt to try. If your creditors receive and agree to the terms of your goodwill letter, make sure you receive the agreement in writing to keep your creditors accountable.
Can a 30-60 day late payment be deleted that took place during the pandemic?
Yes, there are multiple ways to resolve the situation. Unfortunately, Congress has not helped and made it easier for people and left it to lenders to decide who gets a late payment and who doesn’t during this outbreak.
Although first let’s discuss what qualifies as a late payment incurred during the pandemic.
These would strictly be late payments that we due in late February or March that you didn’t make.
It would not cover any payments you missed before late February or March 2020.
If you have such older late payments, then they’re not pandemic-related late payments, and there’s a different process involved to remove older late payments.
Before we move on to how to remove late payments during covid-19, it is vital to access your financial position, in order for us to find your best path forward. So let’s answer this question first.
Removing a recent late payment if you’re able to make all the past due payments ?
In the event you’re currently able to make all payments and are financially stable, but just had a missed payment or two, then here’s what you need to do:
STEP #1: Call & speak to the creditor
Call the lender, request that they remove the late payment from your credit report, as it was incurred due to the coronavirus outbreak and you’re able to make the past due payment today.
Do stress if your state or city had a ‘shelter in place,’ at the time of the missed payment, or if you were quarantining yourself due to Covid-19 symptoms. If there is proof of foreign travel which had you stranded or proof of loss of income or health complications, do offer to provide that.
Be sure that the phone representative is clear about you wanting the “late payment removed,’ which should not be confused with ‘getting the late payment fee reversed’ (although you can ask for the late payment fee forgiven as well ). Now you can also suggest they backdate a payment deferment for you so that there was no payment due the prior month.
If they don’t agree to remove the late payment or give you a back-dated deferment to remove the late payment then make your payment to keep more lates from coming on and move to the next step.
STEP #2: File a credit dispute
If you find any errors on your credit report, you can file a dispute with the credit bureau that generated the report. You can also dispute the mistake with the creditor.
You can start this process by sending a dispute letter to each credit bureau that reported the mistake. The dispute letter should clearly state the negative information you’re disputing, include any documentation of the inaccurate information, and request that the item is corrected or removed.
After receiving your dispute letter, the creditor or credit bureau has 30-45 days after receiving your dispute to investigate the claim. You should be notified of the results after the creditor or credit bureau has finished their investigation.
If the creditor or credit bureau has proof that the information they are reporting is correct, it will stay on your credit report. However, if they agree that the information is incorrect, they must remove it from your credit report.
STEP 3: Engage the creditor’s ‘executive resolutions dept’ or ‘office of the CEO’
Most lenders have such a high-level customer resolutions department, which goes by different names, depending on the lender. Capital One has an executive resolutions department and so does Chase, Bank of America, Amex, and virtually every major lender.
Just do a google search to either find the phone # for this department or Google for the email address.
If all else fails, simply find out the headquarters address of the lender and send an overnight letter with a signature required addressed to the CEO. Include your phone # and email, and chances are very high that you’ll get a response back.
STEP 4: File a CFPB complaint against the creditor
This is a highly effective strategy that we’ve tested over the years. Consumer Financial Protection Bureau (CFPB) is a government agency whose purpose is to protect consumer rights in the financial sector. Their website www.consumerfinance.gov, has an online complaint portal, where you can simply have to do two things, state what happened and what resolution you seek. Once you file this complaint, the CFPB forwards the complaint to the creditor, who’ll be required to respond back in about 15 days with a resolution.
STEP 5: Hiring a Professional to Help: how to pick the right credit repair company
Unfortunately, despite running a credit repair company myself for over a decade, I have to say that the credit repair industry is riddled with unscrupulous businesses, who prey on consumers. In fact, even the most successful credit repair companies, Lexington Law and Creditrepair.com were sued by the government consumer protection agency for charging illegal upfront fees and using deceptive marketing tactics.
So how do you pick the right credit repair firm? There are 3 things to look into.
The first is to check their Google Business page for reviews and read through them. Most other review sites, like Yelp reviews, make it easy for anyone to leave a review, whereas Google is very intelligent in filtering fake reviews. Back in the day, the BBB used to be a credible source, but unfortunately, they’ve been known to list businesses in a better light that pay them.
Second, make sure they don’t charge any upfront fees and charge you only if and after your credit is repaired. Yes, that means no monthly fees or any fees until you see results produce.
Lastly, in your state, if there are licensing and registration requirements for credit repair companies, and make sure the company you’re dealing with is properly licensed in your state. For example, in California, credit repair companies are required to be registered with the California Attorney General’s Office and post a bond for $100,000 with the secretary of state.
If you find a company that satisfied these 3 requirements, then you should be good to go!
