• There are new credit card laws that say if a consumer is late and the creditor penalizes the consumer with an increased credit limit, then after 6 months the creditor can set the interest rate back to the initial amount before the late. If the consumer makes timely payments for the next 6 months, It used to be that a consumer could request re-aging the account, meaning that not only would the creditor forgive the late, they would rescind the late listing off of the credit report.
• Re-aging can be positive or negative, if you are trying to get current on the account and plan to bring the balance back to current then re-aging can be a good thing. But if you are past due, in collections and have not paid in some years, then coming back to try and make partial payment will not help matter if you can’t pay in full. It will just reset the statute of limitations; thereby extending the period of time a creditor can sue you.
• This is not something you want to do if you are outside of the Statute of Limitations, that means the debt is time barred and you do not legally own on the debt. You don’t have to pay the debt.• If they are unwilling to remove the late, you want to go to the credit card web site, see if you can find contact information for a president or CEO of the company and write a request directly to them. Sometimes if you get a higher up person involved they may take a personal interest to help the consumer.
• If you don’t succeed the first time, look for a different person to write to. Another direction for looking up executive officers is using www.planetfeedback.com you can submit letters though this site, or just look up the address and send the letter yourself.
• There should also be an address on your statement with a dispute address – you can try to also send letters this direction.
• You can also use the address listing on your personal consumer credit report. This sometimes goes directly to the reporting department.
• Don’t give up – sometimes you have to write more than one letter before seeing results.
• If all else fails, you may just dispute directly with the Credit Reporting Agencies, in your dispute tell them you do not agree with the late, and you would like the late removed. It might get deleted that way.
When writing a Good Will Letter, be sure to cover these points:
A. Explain to the creditor what happened, like if you were sick, if you just forgot, if you lost your job, if there was a family emergency or so forth.
B. Pay the late amount immediately, and point out in the letter that you were quick to remedy the problem. Explain what steps you have taken to insure that the late never occurs again. Like say that you set up automatic bill payment with your local bank.
C. Point out your past good payment history and how long you have been a member of their company.
D. Tell them that you are currently applying for a major loan, and that you fear this negative listing on your credit report might prevent you from obtaining a good interest rate, or worse prevent you from being approve for the loan.
E. Ask if they can please reconsider the late, and remove it from the account listing on your credit report.
F. Ask if they can send you a response in writing if they see it in their way to agree and remove the negative data. (This way if they fail to update the credit reporting agencies – you can just forward a copy of the letter to the credit reporting agencies yourself).
G. Be sure to thank them for their time looking into the matter, and let them know that you look forward to future business with them.
Note: Send the letter certified mail, return receipt requested. This way you get a green card back confirming their receipt of the letter. Give them 30 days to respond before taking other action, like sending follow up goodwill letters.
• Persistence is the key; a late can remain on the credit report for 7 years, if the account is still open after 7 years it will revert back to positive. Often consumers get flustered over the laps in action and the stress over the added fees and maybe even over the credit limit fees. They jump to conclusions and close the account with the late listing permanently stuck on that account to show for 7 years. The account would turn positive, but then it would only report 3 more years as positive listing.
• Mortgage lenders tend to overlook a late if it is older than 2 years. As the late ages it lessens in the affect to the credit score.
• A late can affect 35% of the overall credit score, resulting in at least a 20 point decrease. So as you remove the late the score will rebound. That is for each late that occurs before you catch it back up to current.
You don’t want to just willy nilly go disputing the late with the credit reporting agency, these are otherwise good positive accounts, contributing more positive effects on the credit score then it is hurting it. If you dispute and it results in deletion of the whole account this could greatly affect your credit score.
Exception is if your late listings are ongoing like over 90/120/150 days late. In this case you are going to be unlikely to get the creditors collaboration to remove all of the instances of late listings showing on the account. In this case you might just want to dispute direct with the credit reporting agency hoping for deletion.
It is important to enact damage control, take initiative to repair mistakes and improve your credit rating at the same time.
