The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
  • Books
  • Categories
  • Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
No Result
View All Result
The Money Coach
No Result
View All Result

Will a Late Payment Hurt My Credit Rating?

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Credit Scores
Reading Time: 2 mins read
late payment
9
SHARES
144
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Q: If I am a little late with a credit card payment, do you automatically get late fees, a higher interest rate or will it hurt my credit rating?

A: You should try your very best to be timely with all your credit card payments, because if you are late on a bill, you do risk late fees, potential interest rate hikes and possible damage to your credit score. All of these possible consequences, however, can only be done within the context of existing federal laws.

For example, the Credit Card Accountability Responsibility and Disclosure Act, also known as the Credit CARD Reform Act, went into effect in 2010.

Among other things, it prevents credit cad issuers from retroactively increasing your interest rate, unless you’ve been 60 days or more late paying your credit card bill.

Also, the Card Act requires your credit card company to give you 45-days notice before an interest rate hike, up from 15 days notice. You can legally reject a rate hike and close the account. Under this scenario, you would have the right to pay off the debt over five years at your original interest rate.

If you don’t close the account, and you accept a rate hike, it’s important to know that there are limits on how long banks can impose so-called “default rates” (i.e. higher interest rates) after you’ve been late paying a bill.

Under the Card Act, default rates can only be charged for six months, provided you pay your credit card bill on time during that period. After six months, your credit card issuer must restore your rate to its previous level.

When it comes to your credit rating, though, a late payment can haunt you a lot longer. The Fair Credit Reporting Act allows negative information (such as late payments) to be included in your credit reports for up to seven years.

The good news is that just being a “little” late on a credit card payment – say a few days or even a week – won’t impact your credit rating. Creditors can only legally report you to the credit bureaus if your payments are late by 30 days or more.

There is one final caveat for those making late payments: If you have a special financing offer or a promotional rate (such as a 0% deal), being late with a payment, even only a few days late, may mean that you jeopardize that special low rate.

So again, always do everything possible to pay all your credit card bills – and other bills too – on time.

Tags: Credit Card Accountability Responsibility and Disclosure ActCredit CARD Reform Actdefault interest rate
Previous Post

Best Ways to Create a Safety Net After a Financial Downfall

Next Post

Actor Stephen Baldwin Arrested for Alleged Income Tax Evasion

Related Posts

credit score drops

What to Do If Your Credit Score Suddenly Drops Unexpectedly

by Lynnette Khalfani-Cox, The Money Coach

Need a quick refresher about how your credit score works? Due to inflation, many consumers are being forced to rely on their credit cards to make ends meet. As a result, many consumers have seen their credit scores go down as their balances go up. Here are 3 articles that...

rent payments to boost credit score

How to Use Rent Payments to Boost Your Credit Score

by Lynnette Khalfani-Cox, The Money Coach

This post originally appeared on Sisters from AARPBlack folks often face a host of credit challenges stemming from lower incomes, discrimination, a lack of knowledge about credit scoring and more. But one additional factor — the low rate of Black homeownership in America — has also meant diminished credit scores....

protect your credit score

How to Protect Your Credit Score After Job Loss 

by Lynnette Khalfani-Cox, The Money Coach

A lack of income makes it hard to cover your expenses, which can cause your credit score to fall. But there are ways to preserve it, even if you are out of work. Here are four tips for maintaining your credit score if you have lost your job.

Best Way to Check Your Credit Score Using Apps

The Best Way to Check Your Credit Score Using These 4 Apps

by Guest Blogger

Did you know that on a $21,788 auto loan, if you have an excellent credit score (740 – 749), you can pay 311% less in interest compared to an individual with a fair credit score (580 – 669)? 311% less! Your credit score determines whether you qualify for things like...

DTI Explained

DTI or Debt-to-Income Ratio Explained w/Video

by Lynnette Khalfani-Cox, The Money Coach

If you’re in the market for a loan, chances are that lenders are going to assess something called your “DTI” – also known as your Debt-to-Income ratio. What Exactly is a DTI? And, how can you improve it in order to get that loan that you want? How DTI is...

4 Summertime Risks to Your Credit Score

by Lynnette Khalfani-Cox, The Money Coach

Just because summertime is here and you might be taking it easy, that doesn’t mean you should let your guard down when it comes to your finances. In fact, during the summer season, you should be aware of a number of potential threats that can hurt your credit rating. Some...

credit score drop

What to Do If Your Credit Score Drops Unexpectedly

by Lynnette Khalfani-Cox, The Money Coach

  Having your credit score fall unexpectedly can be as bad as losing a significant amount of money. With a lower score, your opportunities for low-interest loans, lower insurance premiums, and more affordable mortgages may be out of your reach. What’s worse is that these fluctuations may come from out...

Load More

Popular Posts

  • Car repair

    What to Do If You Can’t Afford a Car Repair Bill

    1379 shares
    Share 552 Tweet 345
  • What to Do if Your Spouse Stole Money From You

    1170 shares
    Share 468 Tweet 293
  • What to Do If You Can’t Afford to Leave Your Spouse

    1107 shares
    Share 443 Tweet 277
  • Here’s Why I Pay My Kids For Good Grades (And Maybe You Should Too)

    1012 shares
    Share 404 Tweet 253
  • What Do All Those Strange Codes In My Credit Report Mean?

    816 shares
    Share 326 Tweet 204
  • Do This Now If Your Wages Were Not Reported

    747 shares
    Share 298 Tweet 187
  • How to Find Out if a Debt Collector is Licensed to Collect Your Debt

    727 shares
    Share 291 Tweet 182

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

RSS / Sitemap /Submit an Article / Privacy Policy / LynnetteKhalfaniCox.com

No Result
View All Result
  • Books
  • Categories
  • Contact Lynnette
  • Get Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
  • Home
  • Subscribe to Newsletter
  • QR Code

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist