Insight from a Credit Bureau Agent

I had the opportunity to communicate with a former representative of one of the big three credit bureaus who is now working in the mortgage business. Our conversation turned to credit, of course.

I asked about a scenario where the person had good credit but one 30-day late payment had plummeted their credit score.

The person hadn’t meant to be late, but mistakes happen.

As a representative who read dispute letters and made judgment calls every day, how would she handle a letter that said the late payment was in error, that they paid their accounts on time, and that their credit was very important to them?

“How likely would it be for you to delete that late payment?” I asked.

Her reply: “Whenever I saw that the person had a good history of paying on time and there was only one late payment? Yes, I would delete that all day long!”

She went on to say that a low score due to one late payment was not indicative of the person’s credit habits, and that it was unfair to penalize them in a situation like that.

This is interesting, because the person who has a 750+ credit score, who accidentally accrues one 30-day late payment, is penalized much more severely than the person who has multiple late payments scattered all over their credit history. How is that fair?

The system thinks that if a person with stellar credit suddenly misses a payment, then a financial catastrophe has happened (like getting fired from their job with no savings to tide them over) and they are on the brink of many more late payments.

Is that assumption fair? I don’t think so, but that’s the way the system is set up. And not only that…

If a person with perfect credit has a late payment with one credit card, then their other three credit card companies may see that and assume the absolute worst. “Horrors, this person is about to go into complete default on our account! Quick, let’s send them out a notice of an increased interest rate asap!”

Friends, watch your credit. If you accidentally go one day past due, call the creditor immediately and ask them not to post the late payment on your credit report. They will usually charge you the late fee but agree to forego posting to the credit bureaus.

And if you happen to have a 30-day late payment on your otherwise beautiful credit report, send a customized dispute letter directly to the creditor pointing out how you like doing business with them and have always paid on time. If your letter reaches the right person, you have a very high chance of getting that late payment removed.

When the creditor instructs the credit bureau to delete a late payment, it happens pronto without verification required.

For more information on how to Repair Your Credit Like the Pros, see here.

Thank you for reading and recommending this blog,
Carolyn Warren