Late Payments? How Do They Affect Your Credit Rating?

Everyone wants to have a good credit and you are obviously no different. A good credit score means that giving you’re a loan involves lesser risk; this comes in handy when you want to apply for a loan. However, you need to understand that there are quite a few factors that affect your credit ratings and one of most important factors is late payments. Your not only incur late fees due to late payments but it has adverse affect on your credit ratings as well. Therefore it is very important to keep an eye on your payment dates and make sure that everything is paid within the stipulated time.

credit rating tips

A credit report is actually a report card of the history of your entire request for and using of credit. It also includes record of paying back the money that you loaned. This report is send by your creditors to the credit bureaus and the credit bureaus in turn compile all the information into your credit report. Your credit score consists of three digits. Banks, loan lenders, credit card companies, landlords, employers and insurance companies check your credit score to form an opinion about you. And given that late payment can affect your credit score, you can understand how important it is to make payments in time.

If you pay the money after the stipulated time period, your creditors will report the late payment to credit bureaus and this will remain in your credit report for at least seven years after the instance of late payment. Your credit report will have exhaustive information about the delinquency length which lists the late payment as 30 days or 60 days or 90 days past the due date of payment. However, the older the date of late payment the lesser will be its impact on your credit ratings.

There is another important thing that you need to know about late payments. If you have an overall good payment record, a 30 days late payment will not have a major affect on your credit rating or score but 90 days late payment will definitely have an effect. Repeated late payment can also adversely affect your credit score. The creditors keep a strict watch on your credit rating. If a creditor sees that you have an instance of late payment, he might revise the terms of credit. He might increase the rate of interest or reduce the credit limit.

fixing poor credit

 

This free website was made using Yola.

No HTML skills required. Build your website in minutes.

Go to www.yola.com and sign up today!

Make a free website with Yola