How to correct a late payment record on your credit report

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How to correct a late payment record on your credit report

  • Highlights

  • Avoid late payments to get easy access to credit at a lower interest rate

  • Check your credit report is free from any inaccurate listings

  • Ask for a goodwill adjustment to remove a late payment record

  • Negotiate with partial or full payment to remove a late payment remark

Your credit report summing up your credit history of the past 36 months, indicates your ability to repay to lenders and financial institutions who often refer to your credit report before sanctioning credit. Making sure your credit report is accurate, which also helps ensure your credit score is accurate, can help you get faster approvals and lower interest rates on your loan.

With a late payment record on your credit report, your credit score can be impacted and you may likely to face credit rejection from most lenders. Some lenders may offer you loans despite the late payment record; however, the interest on these loans may be higher than normal. Apart from this, a few studies have also shown that a 30-day delinquency can bring your credit score down by almost 100 points. While it is important to remember to never miss your EMIs and pay them on time, here is what you can do about late payment records that are already on your credit report.

What to do if you have not made a late payment

One of the main reasons why checking your credit report regularly is essential is to ensure that your credit report is free of any discrepancies. In some cases, late payment records are issued due to inaccurate information. In order to deal with such a situation, you first need to confirm the late payment record has been added to your credit history.

You can so this by checking your credit report from CIBIL and other agencies operating in India, including Experian, Equifax, and Highmark. Once you have confirmed that there is a late payment on your credit report, you can raise a dispute. Apart from raising a dispute for the credit bureau to look into, you can also contact your financial institution for precise details. It is also preferred you contact your financial institution first as the credit bureau will not be able to change any reports if your financial institution has the wrong information.

Know How Missed EMIs can Affect your CIBIL Score

What to do if you have made a late payment

If you have defaulted on making your payment here are a few ways you can get your late payment record taken care of.

- Ask for a goodwill adjustment
If you have had a good repayment history with your lender or the financial institution you are borrowing from, you can ask for a goodwill adjustment. While you can request for your lender to remove the late payment record as a goodwill gesture keeping in mind your past history of timely payments, it is up to the lender to agree to your request or decline it. When your lender waives off a late payment record out such a request, it is known as a goodwill adjustment.

- Set up automatic payments
While asking your financial institution to take a late payment record off your profile, they may request you to apply for an auto-debit system to avoid missing payment due dates in the future. This is done to give the lender some assurance that you will not miss out on another payment again.

- Make a partial payment
In case your lender hasn’t agreed to a goodwill adjustment, you can make a partial payment or a part-prepayment towards your outstanding balance to request them to remove the late payment remark from your profile.

- Pay off the complete outstanding balance
You can also consider paying off the entire outstanding balance if you have the funds available and ask your lender to remove the late payment record in return.

Avoid late payments and try to make amends for existing late payment to ensure that your credit score and credit report remain unaffected. This will help you get both collateral-free and secured loans at a more affordable rate.

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