Credit Records – What Affects Them?

After being a financial consultant for all my life, I can tell you for sure that making last day payments certainly reflects poorly on the internal credit monitoring mechanism that your credit card company practices/believes and follows while considering to increase your credit limit.

How late payments affect your credit history:
Making minimum payments certainly does not hurt as badly as making minimum payments on the last day it is due.

Sometimes if your credit card company posts your payment late by a day and charges you a fee of $35 you might think it is hurting you at a time when every penny is precious. The customer service representative is always happy to win your appreciation by waiving off the $35 fee as soon as she gets your phone call to complain about the late fee of $35.

But in fact the damage has already been done as the computer software that calculates your credit score cannot be manipulated even after your late fee has been reversed or waived.  The minimum payment option on the credit card has to be paid on the day it is posted and not on the last day it is due if you want to stay in the good books of the lender.

The worst case scenario is when you feel unsure whether to even apply for a loan at all. Almost all of the borrowers assume that they shall not get back credit as they have delayed payments in the past. This is absolutely a wrong psyche.


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How lenders view delayed payments:
A lender cannot survive without lending his/her money. Even if you have delayed payments in the past still a lender does not easily find a new borrower as you might think. It is always better to pay off as soon as possible and then and re open a new relationship with the same lender if possible.

A lender is always happy to offer re-lend his money to an existing customer with lower credit as compared to a new borrower with higher credit. Remember the famous quote that “a known devil is better than unknown.”

Lenders, like any other business give much higher respect to customer loyalty and want their customers to stay with them. Any lender would appreciate if you keep all your business with him/her rather than take out short term loans from lenders. These are basic rules of the game in lending industry.

I can vouch for sure that if a lender finds on your credit report that s/he is the only one you have your relationship with than s/he would do everything possible to keep you as a client.

Never feel insured in paying off your debt at the earliest and re-open a fresh line of credit at the drop of a hat. You would realize that by playing this strategy the borrower is the KING and the lender is simply a seller of supplier of cheap credit. Good Luck.

My name is Chris Smith and while working in finance for the last good couple of years I have met many people that needed financial help. Hopefully through my articles I am able in some small way to help people make better choices when their money is involved.

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