Afraid a Late Payment Will Ding Your Credit Score? Read This
While it’s true that late payments can hurt your credit score, it’s important to realize that you do have a bit of leeway before things get to that point.
The Difference Between Late Fees and Overdue Payments
If a payment is a few days or a few weeks late, the worst that will probably happen is a late fee imposed by the creditor. In fact, some creditors slap on a late fee if a bill is merely 30 minutes late. Credit bureaus, however, do not consider a payment to be late until its 30 days past due. In fact, the Credit Reporting Resource Guide has established procedures that enable creditors to comply with federal law by ensuring that your payment cannot be reported late until it is at least 30 days past due. That’s not to say that you won’t receive letters or calls about the overdue payment. It simply means that you credit score should not be affected.
Ways Not to Have a Late Payment
There are a host of simple strategies you can use to help in keeping those late fees from adding up.
- Change payment due dates. Set up the due dates to match what works best for you. Payment due dates can be arranged to occur at the same time or you can stagger the bills to go easy on your cash flow. For example, you could have separate payments on the first and 15th of each month.
- Think about automatic drafts…but be careful. Automatic drafts from your bank account can be great, but it’s essential that you have enough cash in your account to cover the bills or else you’ll be slapped with overdraft fees. Automatic drafts are ideal for bills that are the same amount each month, but they shouldn’t be used for accounts that vary greatly from month-to-month.
- Set up text alerts. Most banks that issue cards will help you set up email or text alerts for bills that are coming up. They can also be used to monitor your current balance and other critical information.
Get Disciplined With Your Money; Call The Oswalt Law Group
Getting out of debt takes a bit of work and discipline. We know this can be difficult, and are happy to provide help. If you’re tired of dealing with crippling debt, call us here at The Oswalt Law Group for a free consultation. Our number is 602-225-2222.