Can Credit Repair Companies Remove Late Payments?

Reputable credit repair businesses can help customers raise their credit ratings for a fee. However, others may be scammers.

Remember that a late payment won't be erased if it was reported accurately to the three major credit bureaus. Read on to find out more about credit repair companies.

Should I work with a credit repair service to remove my late payments?

It depends on your situation. You could hire a credit repair company to remove items from your credit reports. On the other hand, you may be able to accomplish this yourself without spending any money.

Is a credit repair service worth it?

Although you can repair your credit on your own, there are specific cases like identity theft where you might need expert guidance. Resolving credit issues requires time and patience, especially when dealing with fake profiles or activities.

When to use credit repair?

You might want to consider hiring a credit repair business for the following situations:

  • When managing complex challenges such as duplicate data, mistaken identities, and misinformation.
  • When you fail to make a loan payment.
  • When applying for a car, house loan, or personal emergency.
  • If you want funds to start a new business and need to increase your credit score.
  • If your credit is in bad shape and you need to start using it, you should check into credit repair.
  • When you don't have time and your credit repair must not get neglected.

Pros & Cons

Hiring a credit repair firm to improve your credit report has many benefits.

Pros

  • Saves time and quick process. Most of the time, credit repair companies will complete the work for you.
  • Expert service. You can trust someone who regularly handles credit repair to manage to correct the score for you.
  • Working with the Credit Bureaus. They work directly with banks, lenders, and credit card providers. They can quickly access your personal financial information and learn what led you to your present financial predicament.
  • Negotiation skills. Through their expertise, they can negotiate better terms for repayment schedules and other choices that help you build credit. 

Cons

  • More expenses. You'll probably end up hurting your finances more if you pay a credit repair company to assist you in reducing your debts or raising your credit score.
  • No control. You do not have complete control when you hire a credit repair company. You must follow their instructions.
  • Beware of frauds. Some credit repair businesses commit fraud, so be careful when selecting one to assist you with your credit.

How long will a late payment remain on your credit report?

The original delinquent date or the missed payment date, remains on a credit report for up to seven years. Even when you settle the past-due sum, the late payment still shows up on your credit record. For instance, if you made a late payment in September 2015, it would be removed from your credit report seven years later in September 2022.

How to dispute an inaccurate late payment yourself?

Follow these three steps if you want to dispute a late payment error on your credit report:

Find the late payment report

Identify the erroneous payment information before you contact your creditor to submit your case.

Reach out to your creditor

Speak with your creditor to resolve the issue. Your claim will be investigated, forwarded to the credit bureau, and removed from your report.

Check with the Credit Bureaus

If your creditor takes too long or refuses to repair the error, you may contact the credit bureau directly. Prepare the credit report of the incorrect payment before contacting them directly using the forms available on Equifax and TransUnion websites.

What are the consumer credit laws and rights?

Consumer Credit Protection Act of 1968 (CCPA)

Consumers are safeguarded from harm by lenders, banks, and credit card corporations under the CCPA. This law mandates the disclosure of the cost of a loan or credit plan, including the interest processes and any associated fees.

The Truth in Lending Act (TILA)

Under the TILA, customers must receive all relevant information about credit products.

Equal Opportunity Credit Act

A lender cannot discriminate against a person or business based on non-financial aspects such as race, ethnicity, religion, or relationship status.

The Fair Credit Reporting Act (FCRA)

Under the FCRA, you have the right to review a free copy of your credit report from each bureau: Equifax, Experian, and TransUnion.

The Fair Debt Collection Practices Act (FDCPA)

Only personal debts are covered by the FDCPA, not business debts. Regardless of the state where the debt collector practices, the FDCPA applies to all third-party debt collectors, including collection attorneys.

 Fair Credit Billing Act (FCBA)

This act protects consumers against deceptive billing practices. The customer is not required to pay the disputed amount while the billing problem is under investigation, and they cannot be penalized for paying late.

The Credit Repair Organizations Act (CROA)

  • The CROA prohibits credit repair businesses from misrepresenting credit history to creditors.
  • They cannot advise you to lie to present or potential creditors.
  • They cannot change your identity to establish a new credit history.
  • You do not need to pay for services before receiving them.
  • A credit repair company must disclose your right to obtain your credit report and dispute inaccurate information.

Bottom line

Reliable credit repair companies may ensure the removal of incorrect data on your credit report. This does not impact your credit score. However, credit repair companies cannot provide any services that you can perform on your own.

FAQs

What to watch out for in credit repair companies?

Avoid scams involving credit repair companies that make empty claims and frequently demand an upfront fee. No one can remove accurate data from your credit report; if a company promises to do so, it's a big red flag.

How quickly can your credit be repaired?

Typically, it takes three to six months to settle all the disputes the average customer raises. It might not take as long if you have a few errors to fix or repair your credit annually.

How much does the average credit repair company cost?

You'll pay $19 to $149 fees per month if you hire a credit repair company. 

About the author Greg Lorenzo

Greg is a financial expert who has been advising his audience on loans for over 10 years. He has a wealth of knowledge and experience in the area, and he is passionate about helping people get the best possible deal on their loans. Greg is an expert in negotiating loans, and he has a proven track record of getting his clients the best possible terms. He is also a strong advocate for financial literacy, and he regularly gives workshops and seminars on the topic.

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