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Credit Score

Don’t Let Your Credit Score Drop

Don't Let Your Credit Score Drop

Want to know what would happen to your credit score if you were late, or just stopped paying your credit card? Watch the dropping temperature to see where you would end up.

Your Credit Score

700 = 30 Days Past Due

Your next statement will reflect a late fee, and the financial institution may hike up your interest rate. They also have the right to report the delinquency to the credit bureaus. However, if you contact them and explain any unique circumstance, they may work with you, and your credit may stay as-is.

650 = 60 Days Past Due

Ugh, even MORE, late fees, and possible interest rate hike. You may also begin to start getting those disheartening phone calls and letters from your financial institution. You might also have your account or card canceled. Oh, and to top it off, your credit score takes another hit.

550 = 120 + Day Past Due

Now it’s getting serious. The collection department from your credit card company gets involved and tries to collect the past due and late fees. They may attempt to do this for up to 12 months before throwing their hand up and moving you to the next stage…oh, yeah, and that score keeps dropping like a rock.

500 = Charged-Off Account

These are not the words you want to hear. The creditor gives up on you and passes your account to a full-fledged collection agency. They are so tired of you that they will take just a few pennies on every dollar you owe to recoup SOMETHING. You thought the credit card companies’ calls were annoying..yup, another credit score hit.

450 = Collection Account

The scary, strongly worded letters and phone calls start. They will come more often and in much stronger language and legal jargon. This is detrimental to your credit score as any collection agency’s efforts show up on your history.

400 = Court Judgement

Just when you thought you ran from this and it’s all behind you, it’s possible, the collection agency can take you to court and try to garnish your wages, or even put a lien against any property you own. Of course, judgment will put that credit score to the point that it will take years to repair.

Each instance of these mishaps does not go away quickly. They will stay on your credit history for seven years. It can also have an impact on your score from anywhere from two to seven years. Having a low or flawed credit score can result in you paying higher interest on any loans, that is, if you can get one. It will also make it nearly impossible to obtain a vehicle, property, or another credit card. If you do, you may find yourself paying in the upper teens or higher interest rates. Of course, these scenarios are examples given above. Every situation is different.

About the author

Willie DeJarnette

Just wanted to provide some basic knowledge of credit cards, credit score, and other credit types financial resources. Always trying to provide an understanding how to use credit cards and basically staying away from financial ruins.

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