Title:
Credit Cards And Credit Scores
Word Count:
556
Summary:
Did you know that your credit cards and your credit scores are often tied
together? It is true, and there are several ways that this happens.
The manner in which you pay—or do not pay—the monthly payments for your
credit cards will certainly have a bearing on your credit score. If you
pay on time, you will earn a better score as time goes by. On the other
hand, if you are late on your payments, your score will go down. Two
interesting facets of this, however, are time and—...
Keywords:
credit, cards, scores, history, finance, loans, requests, repayments,
purchases
Article Body:
Did you know that your credit cards and your credit scores are often tied
together? It is true, and there are several ways that this happens.
The manner in which you pay—or do not pay—the monthly payments for your
credit cards will certainly have a bearing on your credit score. If you
pay on time, you will earn a better score as time goes by. On the other
hand, if you are late on your payments, your score will go down. Two
interesting facets of this, however, are time and—for lack of a better
word—mercy.
Time and mercy come into play when you know that you cannot make the
payments on your credit cards. If you know that you do not have the funds
to make your payments, it is far better to contact the company and
explain your situation than it is to simply ignore the payment. When you
fail to make a payment and fail to contact the company, they simply have
no idea what is going on with you. You may have a legitimate reason for
not being able to make the payment, but they do not know that. When you
miss a payment and have not contacted the company, you can all but expect
to have that missed payment reported to the credit bureaus at about the
30 day mark. If you miss two payments and have not contacted the company,
it is all but guaranteed that it will be reported.
There is a better way to handle these issues. Companies that issue credit
cards almost always have the authority to grant you extra time if you
need it. They can only do this, however, if you contact them before the
payment is overdue or very soon thereafter. If you have a good reason for
not being able to make the payment they can offer different plans to help
get you through the short-term. In many cases, if you can get the payment
into them within a reasonable amount of time, they will not report the
missed payment to the credit reporting agencies.
Consumers should understand that once any type of negative information is
reported and attached to the credit report that information can stay on
the report for up to seven years. During that time, lenders will see this
negative information and it can have an effect on your financial future.
Consumers should also understand that their credit score is determined by
the information that is recorded on the credit reports that are
maintained by the three credit reporting agencies.
The math is simple on this. If you miss payments on your credit cards and
do not contact the companies to make arrangements the missed payment will
go on your credit report. That same credit report will then be used to
determine your overall credit score. In most cases, negative information,
such as missed payments, will result in lowered credit scores. With a
lower credit score, you may find it hard to get future credit cards or
credit in general. You may also be subject to higher interest rates on
those loans that you are able to get. To avoid all of this, contact the
companies that are carrying your credit cards when you need help with
payments. It is well worth the time and effort it takes.