Questions About Your Credit Score

How Will a Late Payment Hurt My Credit Score?

Late payments can greatly hurt your credit score.  We don’t need an expert to inform you in detail why having late payment is a bad thing.  This is common sense.  Credit scores are being based on how good we are in handling our finances.  This will determine how responsible we are to be approved for credit card accounts and various loans.

There are different reasons why we tend to have late payment on our accounts.  It can be intentional or unintentional.  Financial institutions such as banks know all these common reasons why customers are having these late payments on their account.  These common reasons include:

Non-receipt of bills

Emergency/hardship situation

Misapplied payment

Missing payment

Late delivery of the payment

These are commonly used by the customers as reasons why they are late in their payments.  Which of these reasons do you commonly use?  Before you get irate and shout at the customer representatives following up on the other end of the line, validate the frequency and validity of your reason.  Is this the first time that happened?  Or does it keep happening every month?

First, let’s talk about bills not being received by customers.  Have you recently changed your address?  Nowadays, people don’t rely on paper billing alone because mostly everything can be done online.  The first time you use this excuse, it may be acceptable.  But when you’re given that information already and still you rely on paper billing, then that’s something different.

Getting Different Credit ScoresA lot of things can happen to ordinary mail, like incorrect and lost deliveries, and you can’t blame it to your credit company.  That is the main reason why you’re given that option to view and download it online.  It is mainly our responsibility to handle and manage our bills to be paid on time.  We use it, we pay for it.  If we can’t afford it, don’t dare using it.  Let’s just keep it simple.  But how we differ from other credit card holders is how we make payments on our account.

Next common reason is due to an emergency or hardship situation, this is the most valid reason a customer can have.  Like unexpected scenarios, calamities, emergency in the family, these are few things that a company will consider to offer you a payment extension to avoid a late payment hurting your credit.  There are certain terms and conditions that we need to follow though to make these reasons valid.

For misapplied or missing payment, these are easily verified as long as we can present proof that payment has been made.  Disputes can be requested with our financial companies that a delayed payment should not be reported because of the missing or misapplied payment.  This is the reason why it is very important to always get the receipt for every payment we made to easily track the payment and to obtain the cause of the error.  You can’t dispute something that you don’t have proof for.  Without it, how can they start and resolve the dispute?  Think, before disputing something.

With regards to delayed payments caused by late delivery via post, same thing as long as we have the receipt from the post office when was the payment made, it can be resolved.  It is better though to take advantage of any other payment options instead of sending it via post, like direct debit and online payments for our own convenience.

These are the most common excuses we have once we have late payments.  For every excuse, there is a resolution.  If not, we can use it once but it is unacceptable to continue using it.  At the end of the day, credit scores are being computed based on how we pay our debts.  And if we are late, we are being validated by how frequent and severe we are late.  If in doubt about the late payment policy of your creditor, don’t hesitate to give them a call.