How Late Payments Hurt your Credit Rating

Consistently keeping your credit rating in good standing is a much more difficult task than you may of thought. There are various ways that a good credit rating can receive a negative mark; the most significant of these, being late with a payment. In order to accomplish the goal of achieving a high rating or score, here are a few tips:

Avoid Being Late on Your Payment

This is one of pitfalls that numerous consumers fall into. Remember it does not matter if it was your fault or not. If your creditor or lender does not receive your payment by the due date, it is considered late and is at risk for being reported late to the credit bureau. The 3 major credit bureaus are; Equifax, TransUnion, and Experian. A late payment will reflect negatively on your credit bureau report and can impact and lower your credit score.

Three Degrees of Lateness

Lateness typically falls into three degrees:

Obviously, the later your payment the more it can negatively impact your credit score. It has been determined that several consumers have been late on payments; usually 30-60 days, several times within a 5-year period. This can definitely affect your score to a degree, but don’t lose too much sleep over it. There are many instances where a bill gets lost in the mail, a payment gets misapplied by the lender, or a payment gets lost in the mail.

Contest Late Payments

Payments over 90 days late will require your attention. If you are confident that the payment reporting 90 days late is inaccurate, contact both the credit bureau and your lender to contest it. 30 to 60 day lateness is often viewed as an error in organization, lateness over 90 days will make other lenders perceive that you are unable to pay your bills and you come become a higher risk. If you truly were unable to pay the bill; you must take ownership of this; however, if you feel a valid mistake was made, it is in your best interest to dispute it.