The notion of a late bill payment being reported to a credit bureau is one that concerns a lot of consumers. People don’t want a late bill payment being reported to a credit bureau because they simply forget about a payment, or were out of town and returned after a payment date, or were short of cash on the payment date but had the money the next day.
The truth is that a variety of factors go into whether or not a late bill payment is reported to a credit bureau by a creditor. There are official guidelines and unofficial acts that creditors engage in.
Industry guide for late bill payments being reported to credit bureaus
The Consumer Data Industry Association created the Metro 2 Credit Reporting Resource Guide in 1997, which is a standardized format and guide to report credit information. It meets all the standards of the Fair Credit Reporting Act, Fair Credit Billing Act, and Equal Credit Opportunity Act.
The guide provides for what amounts to two grace periods. The first grace period is from the day of the charge until the payment date. For credit cards, this is usually 21-25 days. Then the guide calls for a 30-day grace period, which begins on the day after the payment due date.
So you’re likely to have from 51 to 55 days from the day you make a charge until your late bill payment is reported to a credit bureau.
Due dates are still vital
However, that does not mean you should get lazy about the due dates, because creditors can still report you missing the payment date, which can harm your credit. If you then miss the 30-day grace period, you get reported again for being “30 days past due.” You’d get hit a third time for “60 days past due.”
Reality, however, may play out differently.
Reality check
A creditor wants good relationships with all his customers. There is usually competition for business, except in the case of things like public utilities. Consequently, a creditor doesn’t just want to report every single consumer to the credit bureaus just because they are a day or three late.
The same goes for things like late fees and interest. Those assessments just anger consumers. There’s a downside to being too hard-core, in that a merchant may drive away consumers.
On the other side, a late bill payment being reported to a credit bureau is an absolute necessity with consumers who are routinely late, or who have made a gigantic purchase and haven’t paid up.
How not to be late
You can avoid being late on payments by paying close attention to those due dates. You may want to create a spreadsheet or reminder list, which contains the name of your creditor, the amount due (if it’s the same monthly charge), and the due date.
You can also program a smartphone or use calendar apps to issue reminders.
The best choice is to have the creditor auto-debit your bank account for the payment each month. That way, you’ll never forget to pay.
Late payment image via Shutterstock
Source Article http://ift.tt/1y39EC7
0 comments:
Post a Comment