When it comes to your credit report, it is very easy to lose points, yet quite difficult to recover and fix your credit score. Several factors affect your credit report, including the length of your credit history, how much of your credit you used in a single billing period, and how many credit inquiries there have been on your account. However, one of the fastest ways to lose points on your credit score is to make late payments.
A credit score is essentially a numerical representation to your lenders about how responsible you are as a spender, and how likely they are to get their money back. When you miss a payment, or make a late payment, you are essentially telling your creditors that you can’t be trusted with their money, and you begin to become a risk factor. At Empowerment Financial Group, we understand that there are a multitude of reasons why you may miss a payment. Whether you forgot or you couldn’t afford it and chose to pay your other bills instead, we make it our business to give you options for credit restoration so that you can fix your credit score and have the opportunities you need again.
According to the Consumer Financial Protection Bureau:
“The Fair Isaac Corporation (FICO) reports that for one of its recent scoring models (FICO 8), the addition of any paid or unpaid collections tradeline of at least $100 to a consumer’s credit report will reduce a score of 680 by over 40 points and a score of 780 by over 100 points. Such a significant drop in a credit score will generally increase a consumer’s cost of borrowing credit and in some instances will preclude him or her from accessing the credit market.”
You’ve worked hard to develop your credit score, and with a fairly good score like 780, just one single late payment of a simple $100 bill could drop your score down to 680, or even less! Even if your credit history hasn’t been great and your score is in the 600’s, a drop of 40 points could result in higher interest rates and higher borrowing fees, meaning that you pay thousands of dollars more than you would have with a quality credit score. Even worse, just that 40-point drop could mean that you are denied for many loans and credit cards.
Your credit score is important. We understand. If you have suffered from a drop in your credit score because of a late payment, we offer a free credit repair consultation, as well as the services you need to fix your credit score and get back on track. We are passionate about our clients and will always work with you on a personal level so that you can be confident in us and our credit repair services. Credit issues can happen to anyone, so you don’t have to feel like you are a minority. Contact Empowerment Financial Group today, and see what we can do to help you!