A few months ago I bought my wife a new Jeep. The finance guy showed me my credit report and went on and on about what great credit I have.
Well, I should. Decades of paying off mortgages and other bills all on time, a decent income, yada, yada, yada.
But last week I saw a late payment fee on my credit card bill. After a zillion minutes of dealing with them they insist that the payment came late. While I was ranting and raving around the house about how that wasn’t possible my wife tells me that last month the bill had been returned to our mailbox because it didn’t have a stamp on it! She stamped it and re-sent it and neglected to tell me about it!
:smack:D’oh!!!
So after years and years of perfect payment history, how big or little will this one glitch affect me?
In any case, it would likely improve your credit rating anyhow.
You don’t get top-rated credit by paying all the time on time - with no interest. You get really good credit by paying just a little bit late all the time.
This isn’t true.
Honestly: Almost no one on the face of the earth knows exactly how credit reports work. Even Banks, Even the guy you get financing from for you new car.
Not every company reports consistently, and of those who do, not all report to all 3 (Equifax, Experiean, TransUnion)
The scores are some top secret algorithm designed by the Roswell Aliens.
As Gfactor mentioned, you can pay every single bill 29 days late for entire life and not have your credit score affected at all. That is never taken into account and the credit recording agencies don’t record it at all. Even if you are 30 or more days late just this one time, it won’t do much and even that will fade fast in the numbers so it will be fine the next time you need credit. You don’t have to keep your credit score as high as possible at all times. The three major agencies adjust it all the time so you should be fine. I don’t think you understand the magnitude of what some people do to get true bad credit. It isn’t this.
The other thing you should do is call the credit card company and explain what happened. Chances are they will take the late payment charge off. Really.
If you are late they can declare you a risk and jack your rate up to the max. All other cards you hold can do the same thing ,even if you have never been late with them.
No, I didn’t miss it. I’m just familiar with the actual way that Credit reporting works.
That isn’t almost a formula. That’s a basic guideline. I’ve got a question, have you ever been on the other side of a Finance desk Musicat? Because if not, it’s really not worth having this conversation.
I’m telling you, without question, that the Formula isn’t as simple as that, not even remotely.
I think you’re confusing “paying late” with “leaving a balance, but paying at least the minimum due.” Although, like has been said, nobody knows for absolute certain what works best in getting the highest score. Anecdotally, I have a friend who has only kept a balance for one month on his card in its history (15 years or so) and holds a score in the 800s, so paying everything on time, all the time (with no interest) doesn’t seem to dent your score in any meaningful way.
I know at one time I had zero balances on my credit cards, and my score was lower than I thought it should have been and was told it was because I had “too much available revolving credit”
I guess being responsible and paying off your balances is a bad thing. Anyways, after investigating, I found about five old store accounts that were still open that I know I closed. For example, I had a Zales Jewelry Store card with a $10k limit on it that was opened in 1995 and still active (in 2005) Also a Lowes card with a $5k limit, a Circuit City card with a $2k limit.
I don’t know why, but I just assumed that if I threw the cards away, after a period of time of not using them, they would become inactive. Not true.
I have used all my cards as 30 same as cash for years. My credit score is 799, my wife’s is 804. So not leaving a ballance has not hurt our credit rating.
No. You must pay all your installment debts in time. Always. There is no way you can improve your score by not paying on time.
Credit card companies, though, evaluate you as a customer based in more than your credit score. Here you are more or less right. If you pay your balance in full every time, you are not making them as much money as someone who sometimes leaves a balance and pays interest. Credit cards love their customers who keep a balance and will be nice to you with all different kinds of perks, options, offers and the like.
I am not sure they like late fees as much, though. I am sure those make them a little bit nervous, even if it means some extra money.
Yeah, I hope you meant that as a joke. If not, I have some ‘splainin’ to do for you.
You don’t get reported to the bureaus until you are past 30 days late. If you do manage to get that far down and get a negative hit, it will just be a minor speedbump on an otherwise perfect history. It will lower your score, but continuing to make your payments on time like you’ve been doing all along will bring your score back up. If you aren’t more than 30 days late, don’t worry about it at all, just get that payment in.
No, I meant that you want to leave a balance riding. As long as they believe you will make payments, aren’t grosslyu inflting your balance, having something riding means that you’re paying interest, which means they are making money and will want to lend to you. They don’t make any cash (well, not much, just a biyt from the merchandiser) when you don’t pay interest. If you always, always pay it all off within a month, you will have a lower score than if you pay it off more slowly, but steadily.
