WHAT IS A LATE PAYMENT ON A CREDIT REPORT?
Typically, late payments of less than 30 days do not get reported to the credit bureaus.  When you miss the payment due date by a few days or even two weeks, there may be late fees involved, but those slightly-past-due payments are usually not reported on your credit file.
NOTE: A late payment by even one day can trigger the Universal Default Clause of your credit card agreement resulting in higher interest rates.
TIP: Contact the credit card company immediately and request a goodwill consideration of keeping your interest rate where it was and perhaps reversing the late fee, too.  Remind them that you have been a customer in good standing for however many years and that you had extenuating circumstances that caused the payment to be late.  When they agree, get it in writing.  At the very least, get the employee’s name and ID number, and write down the date and time you talked to them.

Late payments show up on credit reports as 30, 60 and 90+ days late.  A 60 day is more detrimental to scores than a 30 day, and a 90 day is worse than a 60 day, and so forth.  However, recent late payments that are reported have a more severe impact on credit ratings than do older ones.  So a 30 day late payment in the past three months could be hurting scores more than a 90 day payment five years ago.

WHO REPORTS LATE PAYMENTS?
Most national companies that you have a revolving or installment account with report account information monthly to the credit bureaus.  So missing a monthly payment on a mortgage, auto loan, major credit card, retail store account or line of credit will probably be reported.Additionally, cell phone, cable, and other utility companies that do not report directly to the credit bureaus may sell a delinquent account to a collection agency that does report.  So missing payments of any type can lead to a negative mark on your credit. 

COMMON ERRORS
It is estimated that 79% of credit reports contain errors.  Therefore it is important for everyone to check their own credit to make sure it is accurate.  You can do this at no cost to your wallet or your score; click here for more info.

Look for any late payments on any accounts.  You may want to highlight them as you identify them.  Then decide if you ever were late on that account.  If not, you are well within your consumer rights to dispute the validity of the late payment and the credit bureaus are supposed to investigate your dispute with the company reporting it.

Other errors that we see include late payments listed after the date the account was closed.  These can show up months or years later.   Sometimes late payments are reported when an automobile is traded in on a new one and the paperwork sometimes takes a while to catch up with both companies.  The same thing can happen on mortgage refinances, so be sure to check those, too.

Learning about your credit and becoming credit wise is a great way to improve your Personal Financial Fitness.  For further education, order your Credit Analysis today.

CREDIT CARD STATEMENTS
Look at your credit card statements every month to be sure all of the activity on the account is yours.  Unknown charges could be an indicator of fraudulent use and/or identity theft. 
- By contacting the credit card company to report fraudulent charges immediately, you should not be responsible for paying any of those charges.
- By catching identity theft early, you will minimize the amount of time and money spent trying to correct it later.  The chance of a fraudulent account going unpaid and to a collection agency is also reduced.  Collection accounts, whether legitimate or not, are a derogatory item against your score while they are listed on your credit reports.      
Errors do occur
- If there is a duplicate charge for the same item, it raises your account balance which makes your payment higher and also affects the second largest part of your credit score, the balance-to-credit-limit. 
- If your payment is not listed on the correct date, you may receive a late fee and it possibly could end up as a late payment on your credit report, negatively affecting the largest part of your score, your Payment History.
- If you were charged a fee in error, contact the company right away.  Request written confirmation of the correction and be sure to write down the date, time and name of the person you spoke with.

Changes to your account
Some credit card companies are raising interest rates, even on customers with a good payment history. 
- Contact your company and request a lower rate; emphasize your loyalty and timely payments.  You may have to talk to several people before getting to the one that can make a decision.  Keep a written record of the conversation and when they agree to a lower rate, request it in writing.

Some of these companies are lowering credit limits on long-standing accounts, often with no prior notice.
- A lower limit on an account with an existing balance can drastically change your balance-to-credit-limit, impacting your credit scores.

BANK STATEMENTS
Banks are among the many companies raising fees to increase their bottom line.  Check your statement to be sure you are not being charged for fees that you shouldn’t have.  A recent article in the Wall Street Journal highlighted the $25 monthly fee that was being charged on the “free” checking account.
- Contact your bank immediately to request the fees be removed and the charges reversed.  As always, get it in writing to protect yourself.
- Ask for an account review to be certain that you are receiving the best services available for your type of account usage.

BILLING STATEMENTS
Solicitations for products and services often look like legitimate bills that arrive in the mail.  And these companies are counting on most people being too busy to read all the fine print on the statement or too worried about having an unpaid bill to check into it further. 
- Don’t just pay a bill if you do not recognize it immediately.  Take the time to investigate the statement before sending a check.

This applies to business owners, too.  The Arizona Republic reports on a scam that is targeting businesses by sending a notice that corporations need to file their “Annual Minutes Disclosure Statement” along with a bill for $125.  None of this is legit, although it looks and sounds real.  And people send in their money thinking they need to do so to stay in compliance.
- Always read your billing statements, especially if you are a business owner.  Take the time to contact the actual government agency if you receive something you are not sure about; or contact the Better Business Bureau for verification.

You can grow and protect your good credit by following a Personal Financial Fitness Plan.  We can provide detailed information to help your credit rating with your Credit Analysis.  And keep reading those statements.

If you pay your bill in person or over the phone, beware.  Many utility, cable, phone and cell phone companies are charging anywhere from $2 to $12 for this “service”.  If you realize you misplaced the electric bill and want to be sure your service isn’t cut off, it might cost you a few extra bucks to run it down to the electric company or one of their third party processing centers.

1) Set up a system to organize your bills.  As they arrive, you can pay them right then and there to avoid misplacing them.  If you need to wait until payday to pay the bills, organize them in a weekly folder or binder and mark your calendar to sit down and pay them every week at the same time.  You can also put their due dates in your planner or on your calendar.

2) Consider automatic bill pay for recurring payments such as auto loans, mortgage or utility bills.  BE SURE that you confirm with the company that the automatic payments are set up for the amount you want and the date you want.  Many late payments occur because people assume everything is okay after initial set up when there may have been a confirmation step needed to begin.

3) Read your statements.  Whether you pay in person, by check on automatic deduction, you should check to be sure the payment actually got posted to your account.  This is also a good time to check credit card and retail account statements to be sure there are no additional or incorrect charges on your account.

4) If you are charged an extra fee for paying in person, contact the utility company to request a waiver or credit on your account.  Tell them you don’t think it is fair to penalize customers for paying their bill.

Remember, your payment history is the number one factor in your credit score.  No late payments on anything, every single time, is the best way to grow your credit rating over time. 

Contact us for your Complete Credit Analysis to learn how to positively impact ALL parts of your credit score.

 There is a settlement for a class action lawsuit that will distribute over $270 million to consumers.  Of course, the distribution won’t happen until late 2008 or even 2009.  And until all claims are filed, the amount each claimant will receive is unknown.

 But if you bought diamond jewelry during that time period, it may be worth your while to fill out the form.  NOTE: The deadline is May 19, 2008.  The website has all of the details along with the submission form.

So what does this have to do with your credit?  Nothing directly.  But indirectly, it might. 

As consumers feel the pinch of higher costs and continue to trim their budgets, the chance that some bills may not get paid on time increases.  A few extra dollars can mean the difference between paying off that doctor visit co-pay and having a collection account on the credit report.  Or paying down your credit card balances under half of the credit limit, which helps your credit scores.

Remember, the number one factor in the FICO credit score is Payment History.  Paying all bills on time, every time, is the best way to grow and keep good credit.

And if a few dollars from some diamond purchases can help, we think that’s a good idea.