topic Re: Never Be Late, Ever in General Credit Topics

Never Be Late, Ever

Noah_Bodie — Sat, 06 Mar 2010 18:03:50 GMT

Under the right circumstance, a single 30 day late can cost you upwards of 100 FICO points. That is huge. It can be the difference between a 6.5 percent mortgage and a 9 percent mortgage. Posters have reported being a few days late and seeing their CC APR climb 15 percentage points or more. As such, you should do anything reasonable and within your power to prevent this from ever happening.

Never be late, ever. That should be one of your mantras.

Never be late, ever. Say it with me.

Never be late, ever.

Don't water down the words by telling yourself "You shouldn't be late" or "Try to avoid being late".

No. Try not. Do, or do not. There is no try.

Here are some methods which may help.

Automatic Payments

Some OCs offer automatic payments, via check or CC, to be made on the due date. You might have to request, sign, and return a form along with a voided check. Others might give you the option to sign up via their website. This is perhaps the most valuable step you can take. I strongly encourage everyone to do this and wish all my OCs would do it.

With CCs, you can generally select the minimum due, balance owed, or some other amount to be paid. I recommend you use minimum due. This is intended as a safeguard so you aren't late. By only paying the minimum due automatically, it forces you to remain involved and aware of what's on your CC bill, how much is owed, and when it's due. You stay engaged. You still actively pay the monthly bill--down to between 1 and 9 percent util, right? Most OCs won't draft a minimum payment if you've already paid at least the minimum in the billing cycle. Ask your CCC about the details.

I like to think of automatic minimum payments as "brain cramp insurance". If I completely forget about a payment due date, I know the minimum will be made. No late fees, no CC ratejacking, and most importantly no CRA late reporting.

With utility bills, you are usually charged the full amount due when you sign up for automatic payments. As such, I use a CC to pay utility bills.

Utility Budget Plan

Ask your utility provider about any sort of budget plan wherein you are billed a flat dollar amount each month rather than paying a fluctuating monthly bill.

You usually need to have several months of service in order to get on a budget plan. The provider will make small adjustments to the flat price several times a year.

It has worked well for me with Puget Sound Energy. I have electric heat in my apartment, and the wintertime bills are a killer.

Some months there's a credit on the account--for me that's during summer when I'm barely using electric. [No need for AC in the Pacific Northwet.] But many months, there's a debit or balance owed. IOW, by using the budget plan, I am in a way being extended zero interest credit to pay my annual utility bill at a nearly flat monthly rate.

Only real caveat is never be late, ever. Most will bounce you out of a budget plan if you are. The benefits of a predictable almost flat monthly bill are well worth it.

Email Reminders

I set reminders in MS Outlook for 5 days before my payment is due. Payment dates are almost always on a specific day of the month, so a recurring monthly reminder on that day is easy enough to setup in many Email programs.

Pay Online

Online payments at your OCs website generally are best for ensuring your payment arrives ontime without worrying about payments lost in the mail. First time you use it, pay at least several days before payment is due to ensure payment is credited ontime. Some OCs will let you schedule a payment for a future date. Ask your OC if you're not sure. Some sites don't allow future payments, so making a payment pays it there and then.

Billpay

Billpay is also great, but there are payment mailing considerations. The nice thing about billpay is you can schedule payments to occur periodically.

MyCheckFree.com

I really like MyCheckFree.com which is a free online billpay service. Unfortunately not every OC participates, but a number of utilities, telcos, CCCs and others do participate. They do electronic transfers so the money comes outta my bank account on Day X and it lands at the OC on Day X. Kinda like delivering cash in person. You get Email notices in advance and you can schedule payments, either partial payments or full payments. Any amount in fact, but I think there is a $5 minimum. MyCheckFree does not cost you anything to use.

You can set up multiple bank accounts and sign up all the OCs you want. This allows you, if you want, to pay Bill X using Bank Account A, but pay Bill Y using Bank Account B.

You have to schedule the payment at least 2 days in advance. Within about 1.5 days of the payment, you cannot cancel a payment and you cannot alter the payment date or payment amount.

http://www.mycheckfree.com

Message Edited by Noah_Bodie on 03-06-2010 10:03 AM

Re: Never Be Late, Ever

crocpa — Sat, 30 Jun 2007 08:49:00 GMT

I contacted all my debtors and had the due dates changed to the 9th or 10th of every month. I log into my bank account and pay everything on the 1st day of the month. They might change the due date a couple of days, my payment is still on time. If I need to change the payment, I can log into my online account and do it on the spot. Usually auto payments require a lead time for changes.

Re: Never Be Late, Ever

ctrob — Sat, 30 Jun 2007 11:15:41 GMT

Noah_Bodie wrote:
Never be late, ever. That should be one of your mantras.
Never be late, ever. Say it with me.
Never be late, ever.

I agree 110% - I will never be late again - ever.

When I bought my house in 04 I knew my credit was bad (1st mort @ 9%, & a 2nd mort @ 10% - how's THAT for BAD), and thought that if I paid on time my credit would probably go up , yeah right, but it would take 30+ years with all the baddies on there. But at least I paid that mortgage on time. I didn't start working on my credit scores till about 3 mo's ago but very glad I have the Excellent mortgage tradelines on the credit reports.

I now pay everything on time, even sooner. Love my online banking at BoA. It helps organize and be on time. I recently took out a $1000 personal loan at my credit union, I wanted to pay it off early and they said ok but wanted me to pay at least for 6 months. So I set up in BoA my auto pmts to pay twice a month for 3 months, then a lump sum for the payoff. So easy, just punch it in and it takes care of itself.

I used to be awful at bill paying, now I'm in my bank accounts almost every day.

Never be late, ever - Good advice that people need to be reminded of....Thanks Noah

Live Long and Prosper,

ctRob

Re: Never Be Late, Ever

ddivaqt — Sat, 30 Jun 2007 11:43:27 GMT

Great post! This helped me raise my scores by just using the auto-pay method. As I get newer accounts that will be my mantra - NEVER PAY LATE - ALWAYS EARLY.

Re: Never Be Late, Ever

Redbud — Sat, 30 Jun 2007 16:56:22 GMT

These are words of wisdom I started giving to my daugther at the age of 16. Too bad I had to learn the way. Still climbing my way out.

Re: Never Be Late, Ever

so_confused — Sat, 30 Jun 2007 17:52:07 GMT

This is a great post Noah! I think it needs to be at the top of the page. So here you go!

Re: Never Be Late, Ever

fused — Sat, 30 Jun 2007 18:34:06 GMT

bump

Re: Never Be Late, Ever

MidnightVoice — Sat, 30 Jun 2007 19:07:52 GMT

Does that mean I should not be late? Ever? :D

Great post. Voted it a 5

Re: Never Be Late, Ever

Migraine — Sat, 30 Jun 2007 20:31:58 GMT

I felt like Yoda was telling me this..
No. Try not. Do, or do not. There is no try.
I love yoda :)

Re: Never Be Late, Ever

Tuscani — Sun, 01 Jul 2007 00:27:54 GMT

Excellent post.

Re: Never Be Late, Ever

Noah_Bodie — Sun, 01 Jul 2007 22:23:53 GMT

Migraine wrote:
I felt like Yoda was telling me this..
No. Try not. Do, or do not. There is no try.
I love yoda :)

Direct quote from Empire--the best Star Wars flick, IMHO.

Re: Never Be Late, Ever

dog — Mon, 02 Jul 2007 00:52:27 GMT

i think it is also good to mention that the higher your scores get, and the better of a scorecard you move to, the more of a bad effect lates will have on you. i agree wholeheartedly, NEVER BE LATE!

Re: Never Be Late, Ever

ruthiec — Mon, 02 Jul 2007 14:29:23 GMT

I have been a reader for quite sometime but just had to share my story that cost me my refy. Our house has been on the market for about 10 mo. I live in S. Ga. and just like everybody else houses are moving slow and some on our street have taken 18 mo to 2 yrs to sell. I have a terrible mortgage nobody to blame but myself. Anyway in order to do a refy your house has to be off the market in our case we had to show proof it would taken out of the multi listings and everything looked good. Signed all the paper work paid for an appraisal and got a call from the mortgage guy that a 30 day late showed up on our CR. I freaked called AMC (embarrased to admit I am with them) and yes because I was $55.00 short (they screwed up our escrow once again) I pay by bill-pay so had I opened up my last statement I would have seen this (again my fault.) Anyway they put it in a suspense account and by the time I found out it was the 2nd of June. Talk about a heart breaker my hubby's 754 score fell to 657 mine was 685 and fell all the way to 595 yes for one late payment. I call AMC and begged I have written letters explaining I have never been late what do they care they are being sued and closing many branches so it was a so what attitude. So please if you are doing a refy please make sure you are never late because they will pull your credit report again right before closing. I am now trying to do one on our investment property and put out primary house back on the market.

Re: Never Be Late, Ever

Noah_Bodie — Thu, 09 Aug 2007 06:37:32 GMT

Unexpected circumstances can often befall us, and in accordance with Murphy's Law, at the worst possible time.

If you think you're gonna be late, or fear you're gonna be late, call the creditor BEFORE you are late. I think it's best to just be honest with them. Employer changed payday cycle, unexpected medical or school expense, forgot and/or failed to account for this debt this month, or whatever.

Ask whether they have a grace period. This can be heaven sent.

I remember 3 years ago when GMAC screwed up the change of banks for the automatic draft of my car payment. They screwed up. Not me. I faxed them a copy of a voided check and a request to change banks for the draft, and they transposed the numbers in either the routing number or account number. The dingdongs didn't think to call me when payment didn't go through, and they had both my home and work numbers. I was a bit freaked, and I asked about credit reporting. They said not to worry. They sent out a notice when it's 10 days late, and they don't report it late until it's 30 days late. We were only at about day 12.

Re: Never Be Late, Ever

myhearts07 — Thu, 09 Aug 2007 12:10:09 GMT

This credit stuff sucks and even though we need it, doesn't make it suck any less. I was in the same situation as poster before Noah back in April. I only needed 21 points to get this refi that was sweet, well lo and behold, had some late fees with the mtg company that we paid when we sent in the payment. THey held the d--- payment saying they did not know what to do with the extra money that I sent in even though it was an online payment with a section clearly for late fees and I put the exact amount owed. They reported us late to cra's scores dropped 100 points. Been trying to get those points back and refi since May with no luck, or high interest rates. Yea, never, ever, ever, ever, be late. I get paid through the state and I submit paperwork once a month, heard on the news last night that State Comptrollers office is holding up payments to state workers, don't know if we are included, they didn't say, but when checking status after entering payment info on 8-2, still says that info was received and no mail dates. That will totally screw me up and I will just forget about credit because that will blow payments for mid-month.

Re: Never Be Late, Ever

Help — Thu, 09 Aug 2007 14:21:16 GMT

Promise to never be late....ever!!

Re: Never Be Late, Ever

rifleman — Thu, 09 Aug 2007 14:51:49 GMT

never be late, and if you were in the past, then do something about it

Re: Never Be Late, Ever

Joe77 — Fri, 10 Aug 2007 14:19:58 GMT

In regards to this, NEVER be late.

Hopefully you're never in this situation and never do it more than once in a row. But - you're better off taking a cash advance to make monthly payments and have the increased debt, than be late.

Higher balance on a credit card is more easily repaired than a 30-day late.

Re: Never Be Late, Ever

Noah_Bodie — Fri, 10 Aug 2007 19:53:15 GMT

While I eschew the payday loan pit, and I've been in and out of it more times than I prefer, I'd rather pay a payday loan, once, than take a 30 day late hit.

Re: Never Be Late, Ever

rbbyrbsn — Wed, 15 Aug 2007 00:19:06 GMT

if you use something like checkfree schedule your early not on your due date , you can get burned that way, I've heard people getting burned with checkfree, after all they are a 3rd party and can have their own prblems. for last minute payments signup direct with the OC keep money in the bank and you'll be fine

I'm signed up with Chase for my cc statement around the 26th of the month against my emigrantdirect accounts and it takes 3-4 days to post on emigrants end vs when I use chase epay from my online accounts posts next. so with my auto pay my savings is without my credit card payment 4 days or less out of the month.