Missed Payments On Your Credit Score
Missed payments can have a significant impact on your credit score. Payment history is one of the most critical factors that make up your credit score, accounting for 35% of your score. In this blog post, we’ll explore the impact of missed payments on your credit score and provide some tips on how to minimize the damage.
How Missed Payments Affect Your Credit Score
When you miss a payment on a credit account, such as a credit card, loan, or mortgage, the creditor may report the missed payment to the credit bureaus. This information is then added to your credit report, and it can stay on your report for up to seven years.
The more recent the missed payment, the more significant the impact on your credit score. A missed payment can drop your score by as much as 100 points, depending on your credit history and the severity of the missed payment. Multiple missed payments can have an even more significant impact and can cause your score to drop significantly.
How to Minimize the Damage of Missed Payments
While missed payments can have a significant impact on your credit score, there are some steps you can take to minimize the damage.
1. Pay Your Bills on Time
The best way to minimize the impact of missed payments is to avoid missing payments altogether. Make sure you pay your bills on time, every time. Set up automatic payments or reminders to help ensure you don’t forget to make a payment.
2. Contact Your Creditor
If you’re going to miss a payment, contact your creditor as soon as possible. They may be willing to work with you and offer some flexibility, such as waiving late fees or adjusting your payment due date.
3. Catch Up on Missed Payments
If you’ve already missed a payment, the best thing you can do is catch up on your payments as soon as possible. Late payments stay on your credit report for up to seven years, but their impact on your score diminishes over time. The longer you go without missing a payment, the less impact the missed payment will have on your credit score.
4. Check Your Credit Report
Make sure you check your credit report regularly to ensure that any missed payments are accurate. If you find an error, dispute it with the credit bureau.
Conclusion
Missed payments can have a significant impact on your credit score, but they don’t have to ruin your credit. By paying your bills on time, contacting your creditor if you’re going to miss a payment, catching up on missed payments, and checking your credit report regularly, you can minimize the damage and keep your credit score in good standing.
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