How to Dispute Late Payments on a Credit Report

Late payments that are listed on credit reports can do significant damage to your credit rating. Luckily, there are some solutions. If the information regarding the late payment is wrong, you can contact the creditor and ask them to correct the error and provide the credit bureaus with the newly corrected details. If that doesn’t work, you can even file a dispute directly with the credit bureau. Unfortunately, if you did actually make a late payment, your options are much more limited and you may not be able to have a late payment removed from your credit report. Here’s what you need to know about how to dispute late payments on credit reports.

Check Your Credit Reports

In order to stay on top of your history of credit payments and credit score, it’s essential to check and monitor your credit on a regular basis. Canada has two main credit bureaus, Equifax and TransUnion. It’s smart to regularly monitor your credit report with both agencies. You can get your credit report for free from both agencies.

While there is no set rule about how often creditors have to send updates to credit bureaus, creditors tend to update payment status reports approximately every 30 days (i.e., monthly). However, for smaller creditors, such as those who might not have entire departments devoted to updating a customer’s profile, it could take two or three months for the late payment to appear on your report. The important thing is to be as vigilant as possible about monitoring your credit report. By catching mistakes early, you have a much better chance of correcting them quickly and successfully before they have an indelible effect on your credit score. 

Other mistakes you might catch on your credit report include collections and bankruptcies being incorrectly added. You might also see hard inquiries listed that you never authorized. Disputing hard inquiries is a similar process to disputing late payments, or any other errors for that matter. Just remember to regularly monitor your credit report to catch these types of errors.

Reasons Why Late Payments Appear on Credit Reports

In general, there are two main reasons that late payments would appear on credit reports:

1. You actually made a late payment or missed a payment entirely

2. A creditor mistakenly reported a late payment 

If your creditor has mistakenly reported a late payment, the error can be relatively easy to fix. If you made a payment late and are at fault, it will be much more difficult to have the late payment notice removed from your credit report.      

How to Dispute Late Payment Errors

There are several ways to challenge a report of a delinquent payment when you are not really at fault.

Identify which credit report shows the late payments

Hopefully you’ve been monitoring your credit reports with Canada’s two credit bureaus and so you can easily verify on which report the late payment is listed. When you reach out to your creditor to ask them to fix the credit report error, it will certainly help your case to present them with accurate information about where the wrong payment information is listed.

Contact your creditor to fix the mistake

The next step is to reach out to your creditor to ask them to fix the error. Remember that the lender has no interest in making a negative report and harming your creditor-client relationship — especially if you are a good client and make payment on time. After you contact the lender, they will then investigate your claim and confirm that there was an error. The creditor would then inform the credit bureau that the late payment was an error and it will be removed from your report. 

If needed, contact the credit bureaus 

If your creditor is taking too long to fix the error or is simply refusing to correct the mistake for some reason, you may need to reach out directly to Equifax or TransUnion to dispute your credit report. Contact whichever bureau has the credit report with the mistaken payment listed. Both Equifax Canada and TransUnion have credit bureau dispute forms on their website that you will need to fill out to officially launch a dispute.

Be sure to have any receipts or other proof of payment documents ready to send in to bolster your claim. If you send your dispute by mail, you should only mail in photocopies and keep the original documents for your own records. The credit bureau will then investigate your claim and will need to contact your creditor to investigate. If the investigation shows that a mistaken report was made regarding a late payment, the credit bureau will correct the error. Here’s how to dispute your credit report with both Equifax and TransUnion.

Dispute late payments with Equifax

With Equifax, you can either dispute your credit report online or by mail. With either method, Equifax requires 2 pieces of documentation to verify your name and address:

• One government-issued ID (such as a passport or driver’s license)

• One supporting document (such as phone bill, internet bill, or financial statement)

You can submit an online dispute with Equifax by providing your full name, email address, phone number, and reason for the dispute. Once you’ve submitted this initial form, you will receive an email confirming that a ticket has been opened and from there, you will need to submit an online Consumer Credit Report Update Form. 

You can also mail Equifax a completed Consumer Credit Report Update Form, along with photocopies of the necessary IDs and supporting documents related to your dispute. You can mail documents to the following address:

Equifax Canada Co. Consumer Relations Department Box 190 Jean Talon Station Montreal, Quebec H1S 2Z2

Dispute late payments with TransUnion

You can also dispute late payments with TransUnion online or by mail. You can begin an online dispute with TransUnion by completing their 3-step Online Consumer Dispute Service. This includes providing your full name, date of birth, street name, and social insurance number. Once you’ve submitted this initial form, you will gain access to their Online Disputes platform to continue your dispute. 

If you prefer mailing your dispute, you can print and complete a TransUnion Credit Investigation Request Form. You can mail the completed form, along photocopies of the necessary supporting documentation, to the following address:

TransUnion  Consumer Relations Department 3115 Harvester Road, Suite 201  Burlington, Ontario L7N 3N

Check your credit reports after your disputes

If your late payment dispute with either Equifax or TransUnion is successful, the credit bureau will correct the error and remove the error from your credit report. The credit bureau agency should notify you of the results of their investigation. Even if they’ve said that they’ve corrected the error, check your credit reports from both bureaus to make sure the error was fixed. Make sure to follow up if the mistaken late payment notation is not removed within 30 days. 

How to Dispute Late Payments That Were Accurately Reported

If you actually made a late payment that’s been recorded on your credit report, it can be much more difficult to get it removed. Here are some alternatives steps you can take to resolve the matter.  

Goodwill Adjustment from your creditor

Once a late payment is reported to the credit bureau, it can be very difficult to get it removed. As soon as you realize that you’ve made a late payment, it’s always worth reaching out to your creditor to ask them to not report it to the credit bureau. If you are a good client and don’t have a history of making late payments, your creditor might agree to not report it to the credit agency as a goodwill gesture. They may request to have something in writing for their files, so they may request that you write a goodwill letter. 

I have personally had success with contacting a creditor and asking them to forgive a late payment as a goodwill gesture. I once completely lost track of my credit card payment due date and made a payment that was about three days late. I contacted the credit card company who agreed to make a “goodwill adjustment” and not report the late payment because in the five years I had been a cardholder, I had never made a late payment. The credit card company didn’t even charge me a late fee! It was indeed a much-appreciated goodwill gesture on their part. As a rule-of-thumb, it never hurts to ask and be honest with your creditor.

Try to get to an agreement with your lender

It’s also possible that you could come to some kind of agreement with your lender. If you have an outstanding balance, you could offer to pay the balance off completely in exchange for them “forgiving” your late payment. You’re likely to have better luck with this approach if you have been a good client and have managed your debt responsibly up until the late payment. 

Add a consumer statement to your credit report

If your lender refuses to budge, you can reach out to Equifax or TransUnion and ask if you can add a consumer statement to your credit reports. The statement would simply be a brief explanation as to why you made the late payment. Credit bureaus in Canada will allow you to add a consumer statement to your credit report free of charge. 

TransUnion permits you to add a consumer statement of up to 100 words (200 words in Saskatchewan) explaining your situation. With Equifax, you can add a consumer statement of up to a maximum of 800 characters to your credit report. Creditors and potential lenders and others who check your credit report will be able to see your statement and, hopefully, understand the circumstances surrounding your late payment.

How Long Does It Take for Late Payments to Fall Off?

Late payments can stay on your credit report for six years after the date it’s been reported. Even if you pay off the balance, it will still stay on your report for six years. That means that a single late payment could negatively affect your credit score for six years!

Do Late Payments Always Appear on Credit Reports?

In general, creditors must wait until a payment is at least 30 days past due before reporting it to a credit bureau. It’s possible that if you have a history as a good client who doesn’t usually make late payments, your lender may wait even longer before reporting the delinquent payment to the credit bureau. You may, however, be charged a late fee. Additionally, if your payment is anywhere between 90 to 180 days late, your lender could decide to go a step farther than just sending a notice of a late payment to a credit bureau. They could actually close your account.

What Is The Impact of a Late Payment on Your Credit Scores?

Credit scores can play a key role in your success in getting loans, a job or even finding an apartment, which is why you want to do your best to keep your score high. Your credit score is composed of five factors: payment history, credit utilization, credit history, credit mix and inquiries. Payment history is the most significant component in the calculation of your credit rating because it makes up 35% of your score — more than any other factor. Even one late payment could cause a decrease in your overall credit score by as much as 150 points, according to Borrowell internal data. 

The later a payment is, the more significant the negative impact will be on your overall credit score. In fact, after three months, a lender could decide to close your account and send it to a collection agency (known as a charge off), which will have a much more severe effect on your credit rating and stay on your credit report for six years. Furthermore, the more late payments you make, the worse the impact to your credit score will be, making it very hard for you to find any potential creditors in the future because you will be deemed “not creditworthy” and be perceived as too much of a risk.

Final Thoughts

Your credit score and report have a major influence on your financial health, which is why it’s so crucial to keep track of your credit reports and file disputes as soon as mistakes are discovered. To avoid late payments entirely, consider setting up automatic payments for bills and credit cards to ensure you always pay your bills on time. After all, the best way to make sure your credit score stays strong is to avoid mistakes entirely.