Paying your finance and bills late can see these payment discrepancies put on your credit report. This, in turn, can then make it harder for you to secure a home loan or other forms of finance.
Now if you thought that this only applied to late payments made after a certain time frame, say 60-days, then think again. There have been changes made to how your financial history is gathered and reported and this now means that any late finance and bill repayment can be recorded on your credit history and this can affect your credit reputation.
What Changes Have Been Made to How Information is Collected For My Credit Reputation
According to credit reporting companies, since December of 2012, late payments of any kind that are made after the due date are recorded. These late finance and bill payments can then be added to your credit report, which, in turn, can lower your credit score.
This has occurred because of changes made to the Privacy Act of 1988. The Act has been overhauled to include full payment history, rather than only negative finance and bill repayments that had not been paid after 60-days.
The changes to the Act mean that by March 2014, lenders will have access to more financial information about you. This means that your full repayment history, including any outstanding debts, will be made available to lenders. So while late finance and bill repayments may not incur a default, where your lender takes steps to recuperate any unpaid funds, these still will be recorded on your credit history. This could lower your credit score and could also make it harder for you to secure a loan.
How Can I Avoid Affecting My Credit Reputation?
Here are a few hints and tips for you to avoid late finance and bill payment:
- Pay finance and bills when you receive them, rather than when they fall due. This will allow you to develop good repayment habits and will help you to increase your credit score and rating. You will also find that over time you will become budget conscious and better able to manage your finances.
- If you have numerous bills to pay, make sure you prioritize payment according to due dates. If you find that your finances are a little stretched, then make sure you check the due dates on your bills. Organise the bills so the bill that is due first is the top bill and the bill that is due last is the bottom bill. Then pay-off each bill in that order.
- If you find you can’t pay a bill on time, then contact the company who issued the bill and ask for an extension on payment. Don’t let a bill payment lapse. Instead, contact the company associated with the bill and ask for an extension. Most companies will grant you a 1 to 2 week extension for payment or they can put you on a payment plan, where you pay a little each week until your bill is paid off. Opting for these options, rather than letting the bill payment lapse will help you t improve your credit history. incurring a late payment charge and the late payment being recorded.
Do you want to improve your credit history? If so, contact eChoice today and find the right solution for YOU today
Written by eChoice