Credit Restoration Handout


How to Turn Late Payment Marks Into a Positive Credit Rating


We have discussed various ways to change your credit report when you have the creditor’s cooperation and agreement regarding the disputed item. However, without the creditor’s cooperation, negative entries cannot be deleted if the entries are accurate and the creditor cooperates with the bureau's request for verification. At that point, your goal is to persuade the creditor to either tone down or entirely delete the remarks on your credit report. Later, we will deal with the bad debts that you still owe and where you must be even more persuasive with your creditors. For now, we only want to turn those late payment marks into positive credit ratings. To do so, follow these simple steps:

  1. Explain the problem in writing
    Write to the creditor explaining your version of how the problem arose. Be specific. Submit details and full documentation. Appeal to the creditor's sense of goodwill. Whatever the reason for the credit problems, remind the creditor that you eventually paid the balance. Appeal to the creditor and ask him/her to either remove the bad marks now that the account is settled, or at least put in a statement that the account is paid.

    Each letter you send should be consistent with the others so if the creditor’s new comments do appear on your credit file they will appear reasonable and consistent. State a reason for your poor payment history only if it is a strong, understandable reason, such as a job loss, divorce, health problem, etc. Do not include weak excuses for poor bill-paying habits. Send the letter by certified mail, return receipt requested.

    If the creditor won't back down, you may still question the accuracy or completeness of the entry the creditor has filed against you. It is your right to add your version of the situation to your credit file. Your comments as to why the bill was not paid on time must be submitted under any credit request. Your comments may greatly reduce the damage of a particular entry.

    You may not want to comment on any one particular entry, but instead have your credit record reflect reasons for generally poor credit. For example, if you have several negative entries, was the cause a layoff from work, divorce, personal or family illness, or IRS problems?

    These unfortunate situations can happen to anyone and affect an otherwise excellent credit history. Advise credit inquirers if there was one specific event that changed your good credit. Refer to your prior on-time payment history. Convince creditors that these problems are not likely to persist.
  2. Give the creditor 30 days to change your credit report
    Creditors can remove negative marks. Give the creditor up to 30 days to respond to your letter. As was discussed in the previous section, a credit bureau must respond within 30 days from the receipt of your request.

    If they need to request additional information from you to resolve your issue, they will then have an addition fifteen days to respond once you provided the additional details. If you are successful in your request, the bureau will provide you with an updated copy of your credit report.
  3. Pick up the phone
    If letters prove ineffective, try the telephone, which is a more personal way to interact with the creditor.
  4. Don’t give up
    The initial call may have no affect. Don't be timid or give up. Keep trying. Talk to a different person if you feel the previous contact was not helpful. Companies often have many people working in customer relations departments and each person can react differently to your request.

    Once a creditor verbally agrees to change your credit status, follow up the phone conversation with a letter confirming that agreement. Have the creditor sign the letter and return it to you. The letter is an important tool. If the creditor forgets or later refuses to change your status, you can then send the letter to the credit bureau as evidence of your prior agreement with them.

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How to Turn Late Payment Marks Into a Positive Credit Rating
How to Turn Bad Current Debts Into a Positive Credit Rating
Use A Consumer Statement to Explain Negative Credit History
When The Consumer Statement is Most Effective
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