Let’s talk about getting current and staying current with your credit payments.
This is important, and in a previous post I said that you always have “access” to credit, always. Most people seem to think that once your credit is damaged, that’s it. Quite the opposite is true, in fact, at any given time you can re-establish your credit if you missed some payments, or completely dropped an account due to a job loss.
Typically, most credit card companies won’t report you late until 60 days out. You will have to call them to verify this, but most times they will give you a grace period to be late. One of the first steps to avoiding late payments is to be aware of this timeline. I understand for a lot of people this can be challenging to manage, especially if you have multiple credit card accounts. I always say that you should be proactively checking your credit at least once a week. You can do this by using an online service such as www.truecredit.com and ensuring that you are logging in to refresh your report as often as possible. They update their system every 24 hours so you will always have the latest update on your file.
As far as the impact to your score, late payments will affect your score, but you can always pick it back up. The longer you pay your bills on time after being late, the more your FICO score should increase. Older credit problems count for less, so poor credit performance won’t haunt you forever. The impact of past credit problems on your FICO score fades as time passes and as recent good payment patterns show up on your credit report. And good FICO scores weigh any credit problems against the positive information that says you’re managing your credit well. Also keep in mind that you can always dispute items on your report at anytime. You can do this—with no impact to your score—to verify if everything on your report is correct.
So, if you are behind on your payments, don’t fret. You can still add positive tradelines as time goes on and I highly suggest this as a strategy, even if you have negative items on your credit. Get current on your credit card bills—no matter if you’re behind—and stay current.
Problem: You’re behind on credit card payments and you need to get current.
Solution: In order to get current on your credit card payments you need to make sure you can plan ahead. If you are behind you can always call the credit card company and workout a payment arrangement with them. Of course this won’t change their reporting of late payments on your report, but it will aid in getting you caught up so they can start reporting you as current. There is a preventative side to credit maintenance, and there is a corrective side. I always recommend proactivity and preventative measures before anything, but however, if you find yourself behind at this point these are my recommendations.
2015 CREDIT RESTORATION PROGRAM
If you are interested in our Credit Restoration Program where we consult our clients on restoring their credit profiles to align with their personal and professional goals email me now at dean@deancantave.com with the subject line, “Credit Coaching/Consulting Services” to schedule a 30-minute consultation. I want to START you off on the right foot in 2015!
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