Missed Payments And Your Credit Score

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					         Missed Payments And Your Credit Score
You're probably familiar with the phrase "If you think no one cares, try missing a few payments." It's
funny and it's true. Your creditors care big time if you miss or are even a few days late on your credit
card payments.

Your payment history on your credit accounts makes up 35% of your overall credit score, which by the
way, is the biggest factor in determining your score. You may not think much of it, but even being a few
days late sends red flags to your creditors which can affect your score for years to come...

Late Payments and How They Affect You.

There are 4 things that happen to your credit when you have either a late or missed payment and none of
them are good.

1. You're charged a late fee. If you're late or miss a payment your creditor charges you a late fee which
shows up on your next statement; these tend to range from $15 to $39 and you'll keep on receiving them
each month your payment is late.

2. Your interest rate increases. Your creditor has no problem increasing your interest rate to the
default rate or highest rate that they can charge as a penalty. The net affect is that this makes it even
harder to reduce your balances because even more money is eaten up in interest payments.

3. They are reported to the credit bureaus. If you're more than 30 days late on a payment, the credit
bureaus are notified, it's added to your file and can't be removed for seven years

4. Your credit score drops because payment history makes up the largest part of your credit score,
35%. This means that if you are consistently making late payments to your credit card, you could
jeopardize your chances of getting credit and a decent interest rate in the future.

Your Credit Score and Late Payments

We've touched on the 4 results of missed credit card payments: fees, higher interest rates, credit bureau
notification and a credit score drop; but how do late payments really affect your credit score?

Not all late payments are treated equal. 30 and 60 day late payments negatively affect your score in the
months that they occur and have less and less affect on your credit score at time goes by; 90 day late
payments are the ones you really need to be aware of because to a creditor a 90 day late payment is as
bad as a charge off or an account in collections.

As you can see, missing and late payments on your credit cards have a ripple affect on your credit and
can negatively impact your credit score even if you don't know it.

Certain missed payments affect your score more than others but either way when you miss a payment,
your creditors work furiously behind the scenes to ensure that anyone that looks at your credit knows
that you've missed or had a late payment.