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ICFE eNEWS #19-08 - Febuary 25th 2019

How Do Late Payments Affect My Credit Score?

By Jim Garnett, a/k/a Ask Mr.G, a member of the ICFE's Board of Educational Advisors

Late Payments And Your Credit Score
A recent survey by Experian Credit Bureau shows that more than half of U.S. consumers have a delinquent payment on their credit cards. More than a third of those paid late within the last year. 

The three credit bureaus do not consider a delinquent payment a "late payment" until it is 30 days past due. So while your mortgage holder or credit card issuer may charge you extra for paying three weeks after the due date, your credit score should be none the worse for it.

But what about those payments that are more than 30 days past due? "How much" do they affect our credit score and "for how long?"

How Much?
Just one 30-day late payment can lower your credit score by 90-110 points! These lower scores can cost you more for loans, insurance, and can even affect your chances of getting a job. 

Therefore, it is absolutely critical to make your payments on time because late payments impact your credit score significantly.

How Long?
Whatever we do with our credit is like "making footsteps in wet concrete." The footprints do not take long to create, but they seem to last forever!

Specifically, bad marks, such as late payments, stay on your credit report for 7 years (bankruptcies 10 years). Even when they are paid off, the fact that they occurred remains on your file for 7 years.

Lenders prefer to see a credit history with no bad marks on it, but they tend to look more closely at your credit history over the last couple of years rather than the entire seven-year span. So, the older the late payment becomes, the less impact it has on your present credit score.

My advice is to stay as far away from trouble as you can. Make all of your payments promptly and don't risk lowering your credit score by failing to pay on time.

Preview Jim's latest book, "The Nuts and Bolts of Cash and Credit: An Encyclopedia of Financial Knowledge".

Ask Mr. G
Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023

Paul S Richard PhotoICFE eNEWS is available FREE upon request by visiting our Web site and filling out the contact form, and selecting "Yes" for "Add to Mailing List. Please pass this eNEWS on to your peers and interested others and invite them to subscribe for free. Also, visit the ICFE's new Web site: StudentDebtHelp.org

Sent by:

Paul S. Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation and founder of the College for Financial Planning in Denver, CO.) The ICFE is dedicated to helping consumers of all ages to improve their spending practices, increase savings and use credit more wisely.

The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its financial continuing education courses programs and resources. In addition to eight Certification courses covering identity theft, credit files, credit repair and credit scoring, among others, it also publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE is a partner with the national Jump$tart Coalition for Financial Literacy and the California Jump$tart chapter. The ICFE staff is also active with San Diego Saves and Military Saves, both offshoots of America Saves.

The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

The ICFE helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G library, a free eNews service, and an online resource center for students, parents and educators, plus financial education learning tools in the ICFE Book Store.

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