A late payment on your credit report: how long it stays and what a goodwill letter is

Lenders report your payment history to the credit bureaus, and you cannot opt out of that reporting. A payment you made late can appear on your reports as a late payment on that account.

How long it stays

Under the Fair Credit Reporting Act, most negative information, a late payment included, can be reported for seven years. The CFPB adds that positive history can stay longer, even after an account is paid off or closed. The seven-year limit does not apply to a report used for credit or life insurance of more than $150,000, or for a job that pays more than $75,000 a year.

If the late mark is wrong

The CFPB's list of common errors includes accounts reported late when they were not, and a wrong date of first delinquency. Dispute it with the bureau and with the lender that reported it, and send copies of what shows the payment was on time, such as a bank statement or a payment confirmation. See how to dispute a credit report error; the letter builder writes the bureau letter.

A lender that learns it reported something inaccurate must correct it with the bureaus and stop reporting the wrong version.

If the late mark is accurate

The CFPB is plain about this: no one has the right to remove accurate negative information from a credit report. A company that charges a fee to "repair" an accurate late payment is selling something the law does not give it.

The goodwill letter

What is left is asking. A goodwill letter asks the lender, as a courtesy, to stop reporting an accurate late payment. The CFPB describes reporting as something creditors do voluntarily, so a lender may change what it reports, and it may also say no. Nothing requires it to agree.

If you write one, keep it short and factual:

• Name the account and the month that was reported late.
• Say briefly what happened.
• Say whether the account has been current since.
• Ask for the change you want.

Send it to the lender, not to the bureau: the bureau reports what the lender gives it. Keep a copy.

A late payment and a denial

If a late payment is among the reasons a lender gave for turning you down, the denial letter must give the reasons and, if a credit report was used, name the bureau (see what a credit denial letter must tell you).