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Dollars & Sense: When ‘lates’ appear on your credit
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Anonymous user Tue Nov 30, 1999 00:00:00 PST
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0 responses 0 comments Nearly 80 percent of all Americans have some sort of negative mark against their credit.

It could range from a 30-day late payment, all the way to a bankruptcy.
However, the most common negative mark on a consumer’s credit report is a 30-day late.

Without getting into too many details about how lates occur, I will give you a brief overview, and if you have further questions, then contact me at the e-mail address listed below.

There are two ways that a 30-day late, or for that matter, any “late” notation can appear on your credit report.
One way is that you missed your payment or mailed it in too late (let’s hope this is not the case).

The second way that a 30-day late appears on your credit report is that your creditor made an error in their system, and then reported that error to the credit repositories (Experian, Trans Union and Equifax).

What most consumers do not know is that 80 percent to 87 percent of the time, your creditor will report your payment as “late” to the credit repositories.

Let’s say you made a late payment in September, but the credit repositories do not report this late until October. That means the late status is inaccurately reported on your credit report.

However, you know that you were late somewhere around that time, so you accept the reporting of that, not knowing it is damaging to your credit history.

We must keep in mind that credit repositories are mandated to report accurate information as per The Fair Credit Reporting Act, and they (Credit Repositories) pride themselves as reporting accurate information.

 Many lenders require that a consumer not have any lates showing on their credit reports within a 12-month period of time, if that consumer is applying for a high-risk, low-interest rate loan. If you are planning on applying for that loan in September of the upcoming year, your loan might be turned down because the credit bureaus are showing that you were late in September, and not October, of the previous year.

Consumers don’t question their lates 95 percent of the time . We just accept that the credit bureaus are correct in their reporting because, after all, they are suppose to report accurate information, aren’t they?"

The reporting of many late payments could also cost you a higher down payment on the new home that you are purchasing or that new car you are buying.

What most consumers don’t realize is that a creditor values your business.

If you approach and inform a creditor that you are dissatisfied with the reporting of a 30-day negative on your credit report and you have been with that creditor for more than three years, the credit manager — in most cases — will contact the credit bureaus and inform them to remove that late entry from your credit report. You are valued as a customer and that company knows the average consumer will purchase in a lifetime more than $15,000 worth of product or cash advances.

So, it is worth it to a creditor to remove that 30- or 60-day late in order to keep you as a valuable, lifetime customer.

However, if you pay that 30-day late down to a zero balance, your creditor is no longer receiving any principal or interest payments off your account, which might result in your credit card being closed by the credit grantor and can also result in the negative 30-day late remaining on your credit report for seven years after you have fully paid the account (Per Section 605 of the Fair Credit Reporting Act.)

Be very careful about paying off accounts that show “lates.”

In my opinion, it is best to work with your creditors (J.C. Penney, Sears, Texaco, etc.) and not collection agencies in order to have them remove the 30-, 60-, or 90-day late from your report. Then you can pay the account down to a zero balance. In this way, the account will follow its normal process of reporting.

As a consumer in today’s economy, your credit is one of your greatest assets. If your credit is not what it should be, then seek the help of a professional credit consulting firm. There are numerous firms, so choose one that you can check out online or with the Attorney General’s Office of the state in which the company conducts business.

You have to understand that creditors have attorneys, CPA’s, collection agencies, and the credit bureaus, all working for them.  When you are unable to pay your bills, they are there to make sure your debts will be paid, regardless of whether there might be any financial damage to you. They are very diligent and determined to make sure you pay your bills.

In closing, I would like to say that one of the best ways in handling any credit issue is to meet it head on and with the assistance of a professional credit, if necessary.
Remember, you are the author of your own destiny and you, too, can have great credit.

— If you have questions about credit or other financial issues, please e-mail them to: Tonyatxfc@yahoo.com

We will consider running your question and his comments in a future issue of The Voice.

— Tony Grimes is a local, independent debt consultant.

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