How Late Payments and Charge Offs Affect Your Credit Scores

It is a common occurence to have a slow payment on a credit account. It is important that you do not continue to miss future payments, as this will cause long term damage to your credit rating. A secondary effect to this is the difficulty you will have in the future obtaining new credit accounts. As late payments continue to accumulate, credit card companies will charge numerous fees and may raise your interest rate.

Late Fees

Late payment fees generally range from ten to forty dollars per month. Interest rates will commonly increase to 20+%, and if you maintain a balance on your cards you will pay more for the money you borrowed.

Your Other Credit Cards May Be Affected

In many cases, defaulting on a single credit account can cause a chain reaction. Once other creditors find out that you are in default, they will lower your limits and/or increase your interest rates.

While one missed payment may not hurt your credit score terribly, repeat offenses carry greater impact. If you fail to make a payment for ninety days, your missed payments damage your credit score as severely as a charge-off or collection on your credit reports.

If your late payment reaches charge-off or collection status, you credit score will be significantly damaged by this reporting. If you are experiencing financial difficulties, it is best to do everything in your power to avoid going over 90 days late on a credit card payment. If a creditor sends your account to collections, you are increasing the headaches you will face in the future.

When a debt is “charged off”, you still owe the debt. “Charge off” simply means that the creditor has written the bad debt off, but it still exists and collection efforts will usually continue. This scenario will strongly reduce you chances of obtaining a home loan or any other type of financing with favorable interest rates, and you may not be able to obtain further credit for some time, especially within the twenty four months of these events.

The CreditMEND Credit Repair Program is designed to reduce the impact that issues such as slow payments and charge offs on your credit file. Many of us have experienced difficult financial circumstances, and had to miss payments to our creditors. Life happens. A person should not have to suffer continual penalties for years on end for a circumstance that is often out of their control. Let us assist you with getting back on track.