Delinquent Payments Can Haunt Your Credit Score
October 7, 2008 · Print This Article
While the economy of the nation is definitely not as stellar as it has been in recent years, the way in which the problems faced by Americans can and has been exaggerated by the media. Worse yet, the problems exposed to people are not often the ones they should be most concerned with.
Indeed, while the bursting of the housing market and the subsequent mortgage industry crisis is something that everybody should be informed about, these issues are not exactly the prime issue that everybody is facing. Even for those people that are facing these issues or similar ones, the problems go deeper than just what appears on the surface, and can grow into bigger ones that may not be apparent at first.
For most people struggling with their home loans or other debts, having a late payment may just seem like an issue that has to be dealt with later rather than sooner. These late payments can become vicious problems that haunt you for longer than when you finally get around to paying them, however, because they can taint your credit score for years.
Unfortunately, a lot of people are ignorant of their credit and just what it means in regards to their personal finances. Credit is something that underlies every business financial transaction that depends on a loan of any sort. If your credit is negatively affected, this can transform into higher interest rates, surging insurance premiums, or even denial of loans all together.
If left neglected, a late payment takes at least seven years to clear from your credit report. That’s a very long time and much longer than most people realize when it comes to handling their money in a way that minimizes debt. The problem of a bad credit score will last even longer, affecting loans of every kind and making payments a large hassle that drains capital.
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What we have noticed as independent mortgage brokers in the UK is that now the mortgage and loan companies are hunting for any slight default in your history e.g short on payment by $1 or £1 or if you were even 1 day late in payment it is being registered as bad credit and affecting your credit rating this is all because the mortgage and loan companies do not want to lend out any money due to their poor capital ratios and reserves on their books. So the public and customers who have any credit beware of this or face a red mark in your credit score!