Posts Tagged ‘repairing credit after late mortgage payments’

Repairing Credit After Late Mortgage Payments

Considering the very fact that just one late payment on any loan account (including mortgage) can result in a significant decline in your credit score, it is very important for you to know how to go ahead with the task of repairing credit after late mortgage payments. Depending upon your credit worthiness, every single late payment can deduct as much as 50 points, or sometimes even more, from your credit score. The most unfortunate thing here is that sometimes you are always in time with your payments but an entry appears in your report that says otherwise. This can happen, as mistakes can be made by credit bureaus that make those entries or by the creditors who report such information. Such mistakes can prove to be very costly for you and they can have detrimental and long lasting impact on your credit. However, there can also be situations when no mistakes have been made and you are genuinely guilty of not making your payments in a timely manner. Even in such cases, there are ways to repair your credit and put it back on the right track. The process however takes some time in either case. Following is a brief rundown on some of the different strategies that might just work for you.

Do Nothing; Just Wait For The Right Time

When it comes to repairing credit after late mortgage payments, the easiest thing that you can do is to wait for the right time. Negative entries, such as related to late payments, stay on your report for around seven years. So, if you are ready to wait that long, there is nothing you have to do now. Those entries will automatically be removed from your report after seven years. However, even this option is going to work only if you stay in good standing on your other debt accounts.

File A Dispute With The Credit Bureau

If you are sure that you have made the payments in a timely manner and that the entries out there are actually a mistake, you can file a dispute with the credit bureau. Filing a dispute does not cost you anything. You just have to send a letter to the credit bureaus. You even have an alternative option to file the dispute online, but you are advised not to go for that, as you are very much likely to get better response only when you send the letter in your own handwriting through regular mail. However, the entire process may take around thirty days or even longer. Once the mistakes are corrected, you will get a new report, where you will see that your score has significantly improved.

Talk To Your Creditors

While you are working on your strategies for repairing credit after late mortgage payments, you are also advised to talk to your creditors about it, especially the ones who have reported the late payments to the credit bureaus. If you have missed the payments, you should try to negotiate a better repayment plan so that you can avoid the occurrences of late payments in future, as they may further damage your credit worthiness. However, if you know that you have made the payments, you just have to request them to report the correct information to the credit bureaus. If they do, it will accelerate the process of correction.

Improve Your Credit Situation Elsewhere

It is very important for you to understand that your credit score is not determined by just your mortgage payments. You must be using other forms of credit also, such as credit cards, car loans, and others. You can further accelerate the process of repairing credit after late mortgage payments by focusing on other financial activities that can help you improve your credit worthiness elsewhere (in relation to other debt accounts). For example, if you have been making just the minimum monthly payments on your credit card debt, this is the time to start paying the monthly balances in full. The improved situation on other debt accounts will cover the negative impact of the mortgage late payments and you will soon notice an improvement in your credit score.

Start Making The Payments In A Timely Manner

Now that you have seen the negative impact of just one late payment, the last thing you want to do in this world is to repeat the same mistake again. The next month onwards, make sure that you make the mortgage payments in time.

Overall, when it comes to repairing credit after late mortgage payments, you must follow the right approach and work on the strategies that are suitable for your specific situation. You will have to demonstrate patience and some great financial discipline.

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