30 Day Late Payments Will Kill Your Credit Score
Do you have a late payment or two? Or have you had the thought if you just pay a couple days late you will be fine? If so these are the little things that are holding you back from getting a better credit score.
Most individuals have a few late payments and that leaves them with a good credit score, but consumers who avoid this trap have the best credits and are rewarded with high approval rates on loans and the lowest interest rates.
These benefits will add up to thousands of dollars over your life.
You must realize one single late payment will bring down a score more for a person with excellent credit compared to a person with a mediocre rating.
The reason is the high score reflects no late payments to begin with so one late payment will hurt more.
The person with several 30 day late payments will reflect these in the score already and it is like they are just adding to the pile.
Another consideration is the more recent events carry more influence in your credit score.
The formula is smart enough to realize that your recent actions are more of an indicator as to your future actions.
Thus they carry a larger weight.
So forget about the past and move to thinking about the future and never pay late again.
You must also recognize that seven years of your payment history will be taken into account when calculating your credit score; so one late payment today will be with you for a very long period of time.
Also, cancelling or closing an account does not make these go away.
They will remain on your credit report.
Here are some methods to ensure you will never pay late again.
First, you can use online bill pay.
Many banks offer this for free and it has added features of having you account send your bills right to your account.
You then can review you due dates and pay all your bills within in minutes without writing a single check.
A second method is to use a simple monthly budget.
This will outline the money you are spending and it will ensure you save money to pay all your bills on time.
Most individuals have a few late payments and that leaves them with a good credit score, but consumers who avoid this trap have the best credits and are rewarded with high approval rates on loans and the lowest interest rates.
These benefits will add up to thousands of dollars over your life.
You must realize one single late payment will bring down a score more for a person with excellent credit compared to a person with a mediocre rating.
The reason is the high score reflects no late payments to begin with so one late payment will hurt more.
The person with several 30 day late payments will reflect these in the score already and it is like they are just adding to the pile.
Another consideration is the more recent events carry more influence in your credit score.
The formula is smart enough to realize that your recent actions are more of an indicator as to your future actions.
Thus they carry a larger weight.
So forget about the past and move to thinking about the future and never pay late again.
You must also recognize that seven years of your payment history will be taken into account when calculating your credit score; so one late payment today will be with you for a very long period of time.
Also, cancelling or closing an account does not make these go away.
They will remain on your credit report.
Here are some methods to ensure you will never pay late again.
First, you can use online bill pay.
Many banks offer this for free and it has added features of having you account send your bills right to your account.
You then can review you due dates and pay all your bills within in minutes without writing a single check.
A second method is to use a simple monthly budget.
This will outline the money you are spending and it will ensure you save money to pay all your bills on time.
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