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TRENDING BASIC MONEY MANAGEMENT TIPS
09.30.2020 / Borrowing « Back to all articles
How Missed or Late Payments Affect Credit Score
Having good credit is very important in today's economy. Very few people can purchase houses or cars outright, so taking out a loan is often necessary, and your credit score has a big impact on your ability to secure a loan. One major way creditors factor your credit score is by your payment history. Lenders want to know that you are reliable and one way they decide that is by checking your ability to make your payments on time. One poor credit decision can affect you for a long time, so you must take steps now to keep your credit as healthy as possible. If you are trying to keep your credit score high, consider these frequently asked questions about credit.
What Makes up a Credit Score?
There are essentially five components of a credit score. These elements include your payment history, the amount of debt you have, how long you have had a lending account, how many lending accounts you have open, and what type of lending accounts you have. Lenders look for people who have a solid background that shows they have used credit responsibly. Each of these factors weighs differently in your final credit score, meaning that some take precedence over others. However, to have the best score possible, you want to have a well-rounded, positive history in each area.
How Do Missed or Late Payments Affect Credit Score?
Payment history is typically the most important factor in determining a credit score. It can account for up to 35% of your score. When you miss payments completely or make them past the deadline, your score can take a hit and lenders will likely view you as unreliable. They need clients who consistently make payments every month. They see those who have a history of sporadic payments as a risky client to take on. When they see that you make payments in full and on time, they will likely consider you someone good to do business with.
How Can One Avoid Missed or Late Payments?
Life is hectic, and there may be times that it is hard to remember to make a payment on time. A good strategy is to put your monthly bills on an automatic draft from your chequing account. If you find that you simply do not have the funds to make your payments every month, perhaps it is time to evaluate your debts. You may have things that you cannot afford at this time such as a second vehicle in your household. See where you can cut back so that you can reliably make your payments. It is better to have fewer assets right now that bad credit later.
Credit Talk
09.30.2020 / Borrowing « Back to all articles
How Missed or Late Payments Affect Credit Score
Having good credit is very important in today's economy. Very few people can purchase houses or cars outright, so taking out a loan is often necessary, and your credit score has a big impact on your ability to secure a loan. One major way creditors factor your credit score is by your payment history. Lenders want to know that you are reliable and one way they decide that is by checking your ability to make your payments on time. One poor credit decision can affect you for a long time, so you must take steps now to keep your credit as healthy as possible. If you are trying to keep your credit score high, consider these frequently asked questions about credit.
What Makes up a Credit Score?
There are essentially five components of a credit score. These elements include your payment history, the amount of debt you have, how long you have had a lending account, how many lending accounts you have open, and what type of lending accounts you have. Lenders look for people who have a solid background that shows they have used credit responsibly. Each of these factors weighs differently in your final credit score, meaning that some take precedence over others. However, to have the best score possible, you want to have a well-rounded, positive history in each area.
How Do Missed or Late Payments Affect Credit Score?
Payment history is typically the most important factor in determining a credit score. It can account for up to 35% of your score. When you miss payments completely or make them past the deadline, your score can take a hit and lenders will likely view you as unreliable. They need clients who consistently make payments every month. They see those who have a history of sporadic payments as a risky client to take on. When they see that you make payments in full and on time, they will likely consider you someone good to do business with.
How Can One Avoid Missed or Late Payments?
Life is hectic, and there may be times that it is hard to remember to make a payment on time. A good strategy is to put your monthly bills on an automatic draft from your chequing account. If you find that you simply do not have the funds to make your payments every month, perhaps it is time to evaluate your debts. You may have things that you cannot afford at this time such as a second vehicle in your household. See where you can cut back so that you can reliably make your payments. It is better to have fewer assets right now that bad credit later.
