Credit Repair Program -- Step 7. Mortgages and Auto Loans
Creditors are much more interested in keeping you paying what you owe them than damaging your credit rating. Often, if you let them know that the late payment notations they placed on your credit report are damaging you in someway or might very well cause you to default on their loan in the near future, they will remove them.
Of course, your creditor is not obligated to remove the late payment notations and some of them will absolutely refuse to do so on the grounds that "if we do it for you, we have to do it for everyone." But you have absolutely nothing to lose by trying. All they can say is no. If they say no, the notations will remain for seven years and then will be deleted automatically by the credit bureau as required by the Fair Credit Reporting Act.
You may also be able to get negative notations removed from your credit report in exchange for payment or a settlement. Ask that you be guaranteed in writing that if you send in money or settle the account, they will remove the negative notation on your credit report as part of the deal.
If you can't get a negative notation removed, don't worry about it. Just let time take care of the damage. It should cheer you up to know that just six months of paying all of your bills on time will increase your credit score even with such a negative notation still on your credit report. As you continue to pay your bills on time each month your score will increase even further. [See credit repair example]
It is difficult to get a lender to agree to remove such notations if your car has already been repossessed or they've foreclosed on your home, so a letter send to them when this has happened probably won't get you any results.. Your power of negotiation is lost since they've already incurred the costs of repossessing the collateral, which is why you should deal with the issue before it is too late.