Missed and Late Payments Are A Big Deal!

Missed and Late Payments Are A Big Deal!

  If paying your bills on time is not important to you, then you need to make it important to you. Life happens and anyone can miss or be late making a credit card or loan payment. What you do after you are late or miss a credit card or loan payment can make a big difference to what happens to your credit score. If you make the payment within 30 days of the due date, then the worst that can happen is that you could be charged a late fee. That’s not too bad but it’s not good either because you are giving away money that you could have kept by making the payment on time. But life happens and sometimes missed and/or late payments cannot be helped.
If you make the payment more than 30 days after the due date, then it is going to have a negative effect on your credit score. And it will last for seven years! Did you know that your credit score could drop 60 – 110 points for making a payment more than 30 days after the due date? 90 – 110 points for a first time occurrence and 60 – 80 points if it is not your first time. That doesn’t seem fair. If you have been late before, then your credit score has already dropped and it doesn’t have a lot of room to fall so it will fall a little less the next time. Still, that is not going to look good on your credit report or to the lenders who are going to be looking at it when you apply for a loan. That’s why making payments on time should be a priority.
What can you do if life happens and you have to make a payment more than 30 days after the due date? First, do your best to try to make the payment as soon as you can. Second, contact your creditor in writing and take full responsibility for the late payment. Then ask for the negative information to be removed from your credit report. The letter is considered a “goodwill adjustment letter” because the creditor is is under no obligation to remove the negative information but may do so if you have had a good relationship and payment history up to the point of the missed or late payment. If you are new to paying bills, then make sure you make it a habit to pay on time. If you have a history of paying bills late, then make an important change and start paying on time today. It can change your life. All the best.
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