A few questions about credit report

[ssayres]

I am so thankful to have found this web-site. I am trying to make a change in some of my spending habits, and get on the "right track", to a better financial future.

So here is my question...when I make a payment on a loan, if it is a few days past my due date, does that damage my credit score? If technically it is not past 30 days, which I know is damaging does just a few days over time bring your score down. I had never given this much thought. Here recently I have inquired about my score. I had 3 collections on my credit that totalled about $200. I have never been late 30 days with any of my debts. So I wasn't quite sure why my score was a little lower than I had anticipated. So I thought maybe paying a few days late here and there might be the problem, that over time it has done some damage.

Thanks for any tips!

[maat55]

You need to build a small working capital into your account and pay your bills as they come in. Save up one paycheck of extra money and consider it 0 in your account.

If you are using credit cards and not paying them in full, STOP IT. Never use a credit card and not pay in full each month.

Do you have a 3 to 6 month emergency fund?

What kind of debt do you have?

Do you have a financial plan?

A financial plan is a plan on how you intend to spend and save money. Here are some suggestions:

Invest in your company 401k to the match.(If applical)
Payoff all consumer debt.( CC's, car loans etc.)
Build an EF of 3 to 6 months.
Invest at least 10% of income between 401k and Roth or trad. IRA
Have a short term expenditure savings.(Consumer goods, house down payment, cars etc.)
Plan on a house payment that is between 20% to 30% of your take home pay on a fixed rate loan.

These are a few of the big things to consider about personal finance. Do you want to lead a debtfree lifestyle or wisely use debt.

[KGeary]

To answer your question, yes, the credit card company can submit that you had a late payment which will show as "30 day late", which to them seems to mean 1 to 30 days late.

[boosami]

To answer your question, yes, the credit card company can submit that you had a late payment which will show as "30 day late", which to them seems to mean 1 to 30 days late.

A creditor setting a status of 30-day late on an account that is less than 30 days behind in payment is illegal under the Fair Credit Reporting Act.

30 days late does not mean "up to" 30 days late. It means at least 30 days (but less than 60) have lapsed since your payment was due, and the creditor reported that fact to the bureau. If you make a payment 1 to 29 days late, the creditor is required set the status as current to the bureaus to which they report.

Your credit score is made up only of items that are shown on your credit report. Items that do not show up on it (like 1 to 29 day late payments) do not impact your score. This too is part of FICO standards and the FCRA.

So I wasn't quite sure why my score was a little lower than I had anticipated.

You answered your own question: Collections. Even if they have been settled, collections have a drastic lowering effect on your score as long as they are present on your credit report.

[Ryan_Taylor]

Maybe. If you're just a couple days late, you're probably fine. It all depends if the creditor reports that information to the credit bureaus.

[KB24]

So here is my question...when I make a payment on a loan, if it is a few days past my due date, does that damage my credit score?

Paying your loan a few days past the due date can hurt your credit score if your creditor is reporting it to the credit agencies. Here is a pretty good explanation on how credit reports work so you can get a better understanding of where your score is coming from...

A credit report is basically divided into four sections: identifying information, credit history, public records and inquiries.

Identifying information is just that -- information to identify you. Look at it closely to make sure it's accurate. It's not unusual, for there to be two or three spellings of your name or more than one Social Security number. That's usually because someone reported the information that way. The variations will stay on your credit report. Don't be concerned about variations.

Other information might include your current and previous addresses, your date of birth, telephone numbers, driver license numbers, your employer and your spouse's name.

The next section is your credit history. Sometimes, the individual accounts are called trade lines.

Each account will include the name of the creditor and the account number, which may be scrambled for security purposes. You may have more than one account from a creditor. Many creditors have more than one kind of account, or if you move, they transfer your account to a new location and assign a new number. The entry will also include:
• When you opened the account;
• The kind of credit (installment, such as a mortgage or car loan, or revolving, such as a department store credit card);
• Whether the account is in your name alone or with another person;
• Total amount of the loan, high credit limit or highest balance on the card;
• How much you still owe;
• Fixed monthly payments or minimum monthly amount;
• Status of the account (open, inactive, closed, paid, etc.);
• How well you've paid the account.

On Experian's report, your payment history is written in plain English -- never pays late, typically pays 30 days late, etc. Other comments might include internal collection and charged off or default.

Charged off means the creditor has given up, thrown in the towel. He's made efforts to collect and written it off.

Other reports use payment codes ranging from 1 to 9; an R1 or I1 on a report is an indication of a good payment history on a revolving or installment account.

The next section, public records, is the part you want to be absolutely blank. The public records section is never a good story. If you have a public record on there, you've had a problem.

It doesn't list arrests and criminal activities; just financial-related data, such as bankruptcies, judgments and tax liens. Those are the monsters that will trash your credit faster than anything else.

The final section is the inquiries. That's a list of everyone who asked to see your credit report.

Any time anyone gets into the report, it'll post an inquiry. If you call the credit bureau and ask for a copy, it will be on there. It's a very detailed entry record. It's great for the consumer.

Inquiries are divided into two sections. "Hard" inquiries are ones you initiate by filling out a credit application or taking your child to the orthodontist. "Soft" inquiries are from companies that want to send out promotional information to a pre-qualified group or current creditors who are monitoring your account. The soft inquiries are only shown on reports given to consumers, according to Sweet.

Are too many inquiries bad?
You may have heard that a large number of inquiries can have a negative impact on your credit score, but you're probably OK.

The vast majority of inquiries are ignored by the FICO scoring models. They're not the steak in the steak dinner.

For instance, the FICO scores have at least a 30-day buffer period during which auto and mortgage inquiries are initially bypassed and not counted. It also counts two or more "hard" inquiries in the same 14-day period as just one inquiry. So, you could have 30 in two weeks and it only counts as one.

Hope this helps understand the credit reports.

[MaxPowers]

You need to build a small working capital into your account and pay your bills as they come in. Save up one paycheck of extra money and consider it 0 in your account.

All great advice maat, but this is one thing that routinely saved my butt when I was married. Works great until my wife at the time found out we weren't actually at $0.