Breaking through the barrier of misconception
It happens to most people – you’re neck deep in bills and you feel like all you have ever been was either on a payment plan or racing to get a payment in before you become 30 days past due. Knowledge is power; and knowing what is being reported to the credit bureau can help you decide when to pay your bills, and in what order.
Most people think that almost everything that they make payments on monthly will affect their credit in a negative way if they are late on it. This is not true. The truth of the matter is that the only account that can hurt your credit is an account that reports to one of the three Credit Bureaus. So we have to then ask ourselves, if this certain account can’t hurt my credit if I’m late, can it help me if I pay on time? The answer is no, not unless you 60 days late or stopped making payments on it. Then they would send a collection agency and they would most certainly report the account to one of the three Credit Bureaus.
Here is a list of what doesn’t report on your credit:
- Car Insurance
- Cell Phone
- Cable TV
- Gym memberships (and similar)
What does report?
- Credit cards
- Any type of loan
Important Facts to know
When paying your bills keep this in mind. Every single account and bill that you have that you are making a monthly payment or more on, does not report a late payment for anything before thirty days. Unless you are thirty days past due there will not be a late fee, period. Now you will incur late charges and depending on the account it could affect your payment history to whoever might be looking at that account for whatever reason. For example, rent history can sometimes be used to help qualify you for a home loan or a short term loan, so always try and stay current with your rental payments. If you ever need an emergency loan, visit BMG Money, they are America’s number one choice for short-term lending, and can save your credit score from letting life’s little hiccups hurt it.
It can be hard enough worrying about all of the details in our current lives already, so understanding which ones to prioritize can be immensely helpful. Remember that you have that safety net “time frame” for most of your monthly bills. Utilize this information to help make your month to month life as less stressful as possible and continue to make smart decisions that will impact your credit in a positive way.