Minor Credit Infractions
Minor credit infractions may appear on the surface to be exactly that -- minor. However, that only applies to the small, immediate picture, if at all. If you look at the big picture, those small mistakes, such as late payments, running just a bit over the limit, and the like, can have a negative affect on your credit score and report, as well as on other aspects of your credit, and should be avoided to the highest degree possible.
Your credit report, and especially your repayment history, is the primary way that lenders and others are able to make the determinations that they must concerning your credit worthiness and the degree to which you generally demonstrate responsibility in your life. Paying your credit bills late indicates that you are more risky than is someone who makes getting their bills in on time on a regular basis.
Late payments, even just a few days, can be just the excuse needed to raise your interest rates. And, once that higher interest rate becomes attached to your name, the odds are that you'll be dealing with higher interest for a good long time to come. That means that, over time, you'll be spending a lot more money in interest payments than you would if you’d been careful to avoid those seemingly small mistakes. Late payments can also make new potential lenders hesitant to extend you credit, as it will appear that you are having trouble managing the credit that you already have.
This not only affects current credit issues, but future credit matters as well. It can affect the interest rates offered to you when you seek to buy a car or take on a home mortgage, and can influence whether or not you even get those loans. In the big picture, what may seem like minor credit problems can influence the quality of your life beyond credit, as well.
Seeing late payments on your credit report can influence how willing a landlord is to rent to you. Going over your credit limits and having enough late payments to make it seem as though you occasionally struggle to make those payments can make a potential employer think twice about you, as they may think that an employee with money trouble could be tempted to be dishonest. Your auto insurance rates can be affected by your credit rating, as can utility deposits and mobile phone service plans offered to you and the deposits requested prior to service.
When it comes to credit matters, you should act as though there are no small mistakes. They all matter. However, if you’ve already made mistakes, there’s no need to feel hopeless. In the same way that the credit reporting agencies record your mistakes, they also make a note of the positive efforts you make and if you change your habits now, it won’t be too long before you can establish yourself as a responsible credit user by creating a positive pattern of repayment.