In this guide, we are going to discuss the options available to you for removing mortgage late payments from your credit.
Let’s get started!
There will come a time when you want to upgrade to a bigger home. Or refinance it and get a better rate, or even pull out some cash for remodeling or buying something big.
You’ll fill out an application and then bam! The bank hits you with some bad news; they cannot give you the loan you wanted. Left in disbelief, you think to yourself “What is the problem? My credit is perfect, you need to run my application again, or I’m going to a different bank!”
Upon further research and a quick look at your credit report, you realize something appalling has happened. You notice that there is a late mortgage payment reporting from 6 months ago.
For someone who never checks their credit or does not understand how the banks report late payments. Having one, two, or even three late payments from your existing mortgage lender in the last 24 months will kill your credit score.
Along with the dreams of being approved for a mortgage home loan.
Let’s explore some creative options to see if we can get that dream alive again. In the following sections, we’re going to review some options for removing these late payments!
First, you get organized
Figure out why this late payment happened by requesting a free credit report from the lender who turned you down. I also recommend you get your own copy of your credit report.
The good news is you can easily get your own from all three credit bureaus with a credit score. Head over to ID Cyber Center and check out their “Get Protected” service plans. I highly recommend you go with the Premier Pro plan for the best value.
Once you get a copy of your credit report (with credit score) for each bureau, you’ll need to review it to find any errors or bad marks. If you need some help, find a friend or family member who can help you out.
Next, you’ll need to look back in any financial records you have that can prove the payment was made (late or on time). For example, look for cleared checks and bill payments on your checking account statement.
You want to prove one of two things:
- You made the payment on time, but it was reported as a late payment and is clearly an error by the banks or credit bureaus.
- Your intentions were good, but the payment was truly late. Maybe you had a bad month, forgot about it, or had a financial hardship.
Whatever the reason is, there are some options for you, let’s review the first one below.
Option 1: You contact the mortgage lender via the phone
If you decide to contact the lender who is servicing the mortgage account, you can get the phone number from their website or your account statement.
Use caution when calling in, the call could be recorded. Make sure you don’t say something that could conflict with the information on the letter you send in later. If you are not 100% comfortable with this, skip the phone option and proceed to option number 2.
When you call to speak to the representative, be prepared to state your position. You want to remain calm, professional, and firm.
If the late payment is due to an error by the bank, it will be super easy to get it removed. Show the proof of payment clearing your account on time, and you’ll be done. You won’t have to provide much more of an explanation than that.
They may request a copy of your proof, and that is fine, just follow their directions to send it in.
If the late payment was not a bank error, then your best course of action is to show your appreciation, take responsibility for it, and briefly explain what happened.
If you’re finding it hard to build rapport or get the customer service agent to remove it, you can escalate to a supervisor. But at this point, it’s probably best to send the request in via writing (going to option 2).
Option 2: Sending a Goodwill letter
You’re going to carefully craft a letter which is known in the banker’s world as a “Goodwill Adjustment Letter.” This letter is specifically for removing late payments off your account, so the lender will report it to the credit bureaus as being cleared. Then the account is in good standing, and your credit score goes up again.
The beautiful thing about writing into your lender is you can control what you’re going to say. You can take your time presenting a statement of facts, which is a significant advantage over giving them a phone call.
If you need assistance, you can have a friend help you create the letter. If your friend is not qualified to help you, then hire a professional to assist you.
A well-written letter will be taken seriously by your lender. Follow the below tips for writing an effective letter.
A strong goodwill letter will have the following:
- Asks the creditor to empathize with you.
- Is written in a professional style that is pleasant and courteous.
- It shows that you take responsibility for your missed payments.
- It demonstrates that you’ll stay current on your bills in the future.
- It helps if you can point to a particular circumstance (for example, you lost your job but have since found a new one) that caused you to slip, and you can show a recent track record of on-time payments.
- Most of all, Keep it short and sweet!
Be sure to include your account and phone number, name, address, e-mail, and any other documents or bank statements to prove your case.
Send it certified mail too that will make it look important.
After you send the letter in, expect the bank to send you back a letter of response. And remember, once everything is in writing, it stays that way.
Here’s what you can expect to happen!
Just like above on the phone, if it’s clear without a doubt a bank error, they’ll have no problem removing it.
If the late payment was because you made it late, they will still most likely remove it. Then report it back to the bureaus as being removed.
If you get a written response back, that says “sorry we cannot remove it!”
You’ll need to get a bit more crafty in your writing and respond with any additional information they require.
Depending on the lender, this will be easier or harder. If you don’t have a good standing with the bank, you may not get anywhere, even if you escalate it.
Depending on your time and resources you may not get anywhere at all, which then you’ll need to dispute it directly with the credit bureaus. We’ll discuss that in the next section.
Option 3: Disputing with the credit bureaus directly
You can dispute your late payment with the credit bureau’s directly with a “Payment by deletion” letter. It will force them to make an inquiry to the lender reporting the late payment. You can use the template in this link as an example, and you have to send a separate letter to each bureau.
Disputing with the credit bureaus can be a bit tricky. They’re so busy sorting our real errors from technical ones, that there’s a good chance they’ll just fix your credit report based on lack of evidence from the lender.
If you fail with the first attempt, you can keep disputing the late payments. If the bank does not respond to the bureau within thirty days and you are persistent enough, it will fall off. Because the bureaus will conclude that you must be credible, and the lender is not.
After that, if you’re still in a bind, it’s time to call a professional.
Option 4: Adding a note to your credit report
The Fair Credit Reporting Act makes it possible for you to explain your personal financial debacle or issues. You can add up to a 100-word note on all of your credit reports. It’s your legal right!
However, you have to contact each of the three credit bureaus separately.
Use your judgment to make sure the note does not do more harm than good. The only person who will ever read this would be an underwriter for a loan approval. So if them reading it would help the approval on a loan, it’s worth a try.
Option 5: Contact the professionals!
If you’ve failed in the previous options and it’s still an issue for you, you can give up or contact a professional for help. Finding a professional can be quite an effort, which is why you should check out LateRemoval.com
They specialize in the following:
- Calling the legal departments of the banks on your behalf.
- Having a professional attorney do all of the back and forth phone calls, and paperwork.
- Can customize a package of mortgage removals for your individual case.
Giving up will cost you money in lost opportunity, so be sure to contact them for assistance.
What matters most.
You have good intentions and always try to pay your accounts on time. But hey, life happens, and sometimes you get a bad mark on your credit. You should not be punished for seven years while those late payments wait to fall off.
Always pay your accounts on time and pull your credit often so you can stay on top of any future errors or problems that may arise down the road. Especially during a time when you need to apply for a loan for that next car or home purchase.