As you learn more about credit scores, you may want to understand the details even deeper. Having good credit can make a huge impact on your ability to save and make money. Not only do lenders use your credit report to determine if you qualify for a loan, your credit score will also influence the interest rates you pay, whether a new employer wants to hire you, your insurance premiums, and housing opportunities. Given all that, arm yourself with the most information possible in your battle for great credit.
Let’s start with the most important first; the primary impact to your credit report is late payments or delinquencies. Not only do these make up 35% of your credit score, but they are the main red flag all creditors, lenders and other persons of interest look for.
In order to appear on your credit, a delinquency must be reported to a credit bureau by a lender. They usually appear when a borrower falls over 30 days past due on a scheduled credit account payment. These delinquencies are measured in 30 day units. This can mean even if you are only 35 days overdue, a lender will report a 60 day late notice to the bureaus. Once it becomes 65 days late, that same delinquency will move into a 90 day-or-more late category. This can create a very serious black mark on your credit report.
Unfortunately for you, these delinquency notices are only between the lender and the credit bureaus. They are not the same as late notices sent directly to you by a creditor. Occasionally, a lender will not even notify you of a late payment, but still send a delinquency to a bureau. Plus, these delinquencies are no small matter. They can stay on your report for years, even if you respond immediately to make a payment.
The only real solution is to create a process of tracking your bills and payments. It is critical for you to stay on top of your credit. Whatever system works for you, start one today and stick with it.
Related Articles:
*Fixing Errors on Your Credit Report