Credit is the cornerstone of life's most delicate pleasures.
It can also be the reason your life does not have any pleasure.
If you pay cash for everything, chances are you either have no credit score or a very low one.
Do you know what activities affect your credit score? Maintaining at least 50% credit available on all your outstanding credit cards or loans has a positive impact on your credit score.
Applying for too many loans or credit in a short time period has a negative affect on your credit.
Paying your installment debts on time has a positive impact on your credit.
Here is one example of the negative effects of a late payment.
One of my past homebuyers was approved for her home purchase for two weeks.
She paid $1,000 earnest deposit and was moving to Texas from California.
After moving here and staying in a hotel and waiting to close on her home, she paid her LAST car note late (over 30 days past the due date) and was denied her loan 2 days prior to closing.
She was denied because her credit score dropped 100 points.
I was the salesperson and the loan officer and saw $6000 float away as she saw her dream of home ownership float away as well.
I felt bad for her but her mistake had a negative affect on my life as well.
The $6000 payday would have allowed me to catch up on quite a few bills of my own.
So, in conclusion.
Paying your mortgage or car payment late(as I just noted) can have a very BIG(negative) affect on your credit score.
However, if your house payment and/or car payment is not 30 days late, according to the credit reporting agencies, the payment is not late and will not affect your credit.
You will more than likely be charged a late fee by the creditor but it does not show up on your credit report as a late payment.
That is all for this lesson on credit clarity.
Stay tuned for future articles and information.