How Much Does A Late Payment Affect Me?

Written by admin on March 31st, 2011

You might be surprised on the damage a single late payment might be to your credit score. But if you have made a late payment can you find out how much it affected your credit score? Not unless you have been monitoring your credit score and have a before and after number. But even that may not give you the actual change because there may be other factors that changed your score.

Your credit scores have been clouded in mystery for years because each bureau has a different way to figure credit scores. They are similar but they are not the same at any one of them. How things affect your score is also based on different things so they don’t even affect your score the same.

FICO has recently given some data on how things affect your credit score. Since late payments make up 35% of your credit score, I have decided to talk about them first. It is going to shock you and I hope that you understand why I recommend never making a late payment.

Let us start with having only one 30 day late payment (On one item only). That late payment could lower your score from 60 to 110 points. The difference is which bureau and what your original score was. The higher your score then generally the higher point damage to you.

Now imagine how much damage you have done if you failed to make 3 or 4 payments on time. This will cost you thousands of dollars if you are trying to finance a home and possibly an automobile. Your credit is so badly affected that a single late payment could cost you from to dollars more a month for an automobile loan. It would cost you from to 0 a month more for a home loan.

It is critical to know when your payment is due so that you can be sure to make those payments on time. Even if you only make the minimum payment on time, you should make that payment at least. By making your payments on time you will keep your credit score from major damage.

If you have late payments on your credit score they can be reported for up to seven years. Most of them only report your late payments for 2-4 years but it is still hurting your credit score. If you have only had one or two late payments then talk with your creditor about re-aging your account. They might be willing to do this especially if you have had good history in the past. The creditor (if willing) will tell you to make so many numbers of payments on time. If you make those payments on time they will note your account as being paid on time. This will remove your late payment history and the damage done to your credit score.

Good Credit is necessary for everyone in today’s economy. Buying a home or an automobile and even trying finding a good job require credit. If you have bad credit then you should do everything in your power to fix it. Start by getting your credit score accurate. If you need help in getting that done hire a Credit Repair Company. There are a few legitimate companies out there.

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