Credit Cards

It is never too late to repair your Credit. The first place to start is with past delinquencies. These are one of the most common causes of bad Credit and are the largest component (35%) in determining your Credit score. Therefore, they are a big key in making or breaking your Credit score. Delinquencies on your Credit coincide with how punctual you are on making your payments. If you are over 30 days late on a payment, it will damage your Credit score. It is always better to not be late on your payments, but because we are human we make mistakes. But do not despair because there are ways to revamp your Credit. Here are a few factors to consider for preventing bad Credit or further delinquencies:

Timing: The more recent the delinquency, the more it negatively affects your Credit score. Lets say in the last four years you were 30 days delinquent on a loan payment three times in 2003, 2005 and today. The delinquency today will hurt your Credit score a lot more than the one in 2005 which hurts your score more than the one in 2003.

Level: The later you are on your payments, the worse your Credit score and ultimately your overall Credit score and Credit worthiness. The level or order of going from bad to worse is as follows: 30 days is better than 60, which is better than 90 days late. Then the progression goes from 90 days to a charge-off and collections, then repossession, foreclosure and finally bankruptcy. A charge-off is when the Credit card company takes the amount that you owe them off their books typically 180 days after your last late payment, but the borrower still has a debt to pay. Going down the ladder, the lenders can repossess your car or other material possessions and even foreclose on your home. Thus, the level of the delinquency can affect both your Credit score and your livelihood.

Past Due Notices: Past due notices have been known to destroy Credit scores. Most people believe that they have a grace period when it comes to making payments. For example, if your mortgage is due on the 10th of every month and it says that there will be a $200 penalty after the 25th, you can still be overdue without being 30 days late. If you pay anytime after the 10th, you are past due. Some mortgage companies are starting to report past due notices to Credit bureaus if the payment is received after the due date. Once the next payment is made on time or before the due date, the past due notices will come off when the mortgage company updates with the Credit bureau. Its very important to make sure you pay all your bills on time so this does not happen to you.

Missed Payments (Low vs. High): The Credit score penalizes people more for missing high payments than low ones. What Fair Isaac found out is that people who miss high payments are more apt to become 90 days delinquent or more compared to people who miss low payments. If someone was 30 days late on a mortgage payment, he or she would be more likely to be 60 and 90 days late due to a lack of money compared to a small payment. People miss small payments to a Creditor more often because it got lost mail or they forgot to pay. These discrepancies are not as much a derogatory risk to go 90 days late as missing high payments are. Keep a close watch on not missing your payments, especially the higher ones.

Keeping on top of delinquencies is the best place to start making efforts toward a better Credit score. Remember that there is always a financial solution for your Credit and it is never too late.

To learn more about how you can help increase your Credit score, go to Dr. Alan Rosenthal's website at http://www.financialsolutionservices.com where you can find more great information on Credit improvement. And, you are cordially invited to sign up for a FREE Credit Repair and Enhancement Workshop by visiting http://www.financialsolutionservices.com/upcomingevents.html

For additional information listen to one of Dr. Alan Rosenthals Credit talks at Credittalks.html">http://www.financialsolutionservices.com/Credittalks.html

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