Nothing can influence a credit score in a more negative manner than consistently making
late payments. Paying off your financial obligations in a timely manner will be positively
reflected on your overall score, whereas paying late (or not at all) will negatively impact
your credit score in a severe way. Banks, lending houses, and credit card institutions
will take your entire credit history into account when deciding whether to extend credit
to you. In general, a lending institution will approve a much larger amount for someone
with a higher credit score, but will only approve a small amount (or none) to someone
whose credit score is a bit lacking. Hopefully you now have a better understanding of
how crucial it is to maintain a solid credit rating. Let’s take a look at how to improve it by
keeping up with bills.
Pay Bills in a Timely Manner
Paying your financial obligations is obviously the fastest way to improving your
credit, and there is no better way to insure your bills are being paid on time than to
set them up on an automatic payment schedule. You can set up schedules with your
phone company, cable provider, internet provider, gas company, electric company,
and anyone one else who you have an obligation to each month. Another great tool is
an online payment system where you can go in once a month, and with a few clicks
of the mouse, pay all your bills on time. Accounting for over one-third of your overall
credit score is your track record and payment history.
Keeping up with your bills is important at all times, but is much more important as
the time of seeking a loan approaches. A missed payment on your recent record will
have a far more negative impact than a missed payment from a few years ago. Any
delay in paying bills can have an immediate effect on your score. Reputable experts
state that missing even one monthly payment can lower your score over 50 points.
Missing an entire month’s payment could take a score of over 700 and bring it down
into the 570-600 range. Paying off financial responsibilities promptly is a great habit
to get into, for your own piece of mind, and for your credit score.
Nick Muller
king-and-assoc.com