March 6, 2009

Paying late could be one of the worse things you could do to hurt your chances of getting a good credit score.  Late payments effect your payment history which is the largest part of your credit score.  But there are several other areas of your life it could effect.

First is the money you will lose by paying late.  Every account that you pay late assesses a fee.  This could be any amount and your account decides what it is.  You are now responsible for this additional fee.  The fee will be added onto your bill and the money you pay will first go towards the this fee then to the late payment.  So the fee will come first and you must pay this so you are not accessed another fee.

Second is the potential effect on the interest rates you are charged.  Your credit card accounts frequently review your credit report looking for any changes in behavior.  If there is a late payment to any account not only that account but any of your accounts can reserve the right to raise your interest rate.  So one late payment could cause a rise in your interest rates by several different accounts.

Last is going to effect your credit score for a long time.  Late payments stay on your credit report for seven years.  You could be just thinking about today, but they will follow you for a long time.  And could hurt your chances of getting a loan in the future.

You never want to pay late.  Things like having a budget or using online bill pay could be simple ways to make sure you do not pay late.