Since the world lockdown, jobs and businesses have closed one by one. Thus, people started to struggle with their finances.
Many people started to incur late payments on their auto loans, credit cards, mortgages, payment installments, utility bills, etc. Because of these late payments, which you can’t control, there’s a tendency to have negative items reported on your credit report.
If you are struggling with your late payments because of the lockdown, don’t worry because you can settle them.
In this blog, we’re going to discuss how you can remove late payments on your credit report because of the sudden global pandemic.
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Can you still delete a late payment of 30 to 60 days during the COVID-19 pandemic?
A quick answer: Yes! You can still remove the late payment, particularly within 30 to 60 days, which happened since the lockdown started. But unfortunately, Congress wasn’t able to make an easier way for people to fix this issue. Instead, they leave the decision to the lenders on how to manage late payments from their debtors.
Going back to the question, how can you remove 30 to 60 days of late payments during the lockdown?
If you can recall, it was around late February to March when lockdowns were implemented. Any missed or late payments before that time are not covered. If the missed payments were incurred during the pandemic, you have a 60 day grace period to settle the payment. Once settled, you can process deletion of late payments on your credit report.
If you also have outstanding payments pre-pandemic, the removal process is different. But if you manage to keep up with all your payments and only struggle to pay when the pandemic starts, then please read on to find out.
How to get rid of recent late payments if you can settle all your overdue payments?
Step One: Request removal of late payment to the lender or creditor
If you missed a payment during the lockdown because of the coronavirus outbreak, you can call your lender and request to remove the late payment. Tell them you can pay the past due payment today as you are speaking to them.
You also need to explain your current city or state’s status when you missed the payment. Does it have tight lockdown protocols? Or are you in quarantine because you experience symptoms of COVID-19? Explain your condition since the outbreak began.
You can also offer supporting documents like records of foreign travel, loss of your source of income, health complications, etc., if applicable to your situation.
Make it clear to your creditor’s phone representative that you want to request late payment removal, not just reversal fees for late payments. Or you can request to remove both as well. You can also suggest deferred payment, so you won’t have any payment due in the following month.
Suppose they don’t allow the removal of the late payments on your credit report. Or do not agree for a deferred payment, you can proceed to the next step.
Step Two: Contact the creditor's department in charge of dealing with your case
There’s a specific department that can handle this matter. Most major lenders like Capital One, American Express, Bank of America, and Chase have executive resolutions departments. It is a higher-level customer resolutions department. The higher-ups of the company will be the ones who need to deal with your case.
You can search the internet for the contact details such as the phone number and the department’s email address. If you can’t find it online, you can just send a letter addressing the CEO. Don’t forget to include your contact number and email so that they can reply to your request.
Step Three: File a complaint to the Consumer Financial Protection Bureau against your creditor
Filing a complaint is one of the most effective strategies you can do. You can reach out to your creditor regarding your complaint by filing it to the Consumer Financial Protection Bureau or CFPB.
Check their official website and look for the complaint portal. Once you find it, you can write your complaint and the resolution you are seeking. In this case, you have encountered late payments because of the COVID-19 pandemic.
After the CFPB receives your complaint, they will forward it to your creditor. The creditor must respond within 15 days to your complaint and provide a resolution.
Step Four: Seek help from a credit repair company to help remove late payments
Filing a complaint about late payments is a lot of work. Some people resort to hiring a credit repair company to do the job for them.
However, some credit repair companies also face complaints and lawsuits for illegal charges and other deceptive marketing strategies.
As a credit repair company, we will share with you how you can choose a reliable credit repair service.
First, read some of the reviews about the company. You can check Yelp and other known review websites. Unfortunately, some review sites list companies with only positive reviews because those companies pay them. We found out that Yelp has a filter for fake reviews, so you can read some of the clients’ thoughts, whether positive or negative.
By reading client reviews, you can have a better idea if the company is trustworthy.
Second, check if the company charges upfront fees. You can do it by reviewing their pricing plans. Make sure that the company will only charge you once they repair your credit. Be aware if they also have any monthly fees and any other fees charged. Unless they can provide you with results on your credit report.
And lastly, check your state’s requirements on the licensing and registration of credit repair companies. Check and see if the company you choose complies and has a license. If the credit repair company you want to hire meets all of these checks, then you’re all set.
What if you still cannot settle your upcoming credit payments?
You already settled your recent past dues, but how about the future credit payments. We are still in the middle of the pandemic. Many of us are still recovering financially. And since the world’s economy is just recovering, people will still have problems with their income and managing their finances.
In this scenario, you can defer your future payments with your lender. You may contact them and request this option. If you think it can harm your credit score, don’t worry since major banks are offering deferments for about 30 to 90 days and it doesn’t affect your score.
However, smaller creditors or financial institutions might have a specific policy. Make sure to discuss this with your lender accordingly to avoid future problems with your credit score.