Delinquent payments big or small cause huge issues
There are many reasons why people fall behind on bills, and many of them are no fault of borrowers. Unfortunately, however, creditors throughout the state of Florida and beyond are typically unconcerned about why people fail to pay off debts or how small those debts actually are. Understanding how and why delinquent payments can impact people’s credit ratings is important to preventing serious credit issues in the future.
A major problem for many people is that they are not familiar with the information listed on their credit reports, and therefore do not know when negative actions appear. Everything from unpaid credit cards to medical expenses can appear on a credit report, and sometimes a credit rating may reflect inaccurate information. A person’s payment history is the most significant factor in determining his or her credit score, so it’s worth checking that one’s credit report is accurate and ding-free.
Beyond that, the actual size of the debt may not be as significant to its impact on people’s credit reports as the fact that it exists. Delinquent credit card payments, no matter how small, immediately begin compromising people’s credit ratings, as do unpaid bills that enter the collections process. Hundreds of thousands of unpaid debts under $100 each exist today, and all have the potential to affect borrowers’ eligibility for personal loans and important investments.
Speaking with a bankruptcy lawyer can be helpful to understanding one’s financial difficulties and options for addressing any credit issues. Not only can a bankruptcy lawyer educate people about their debt relief options but he or she can also assist people in correcting and/or resolving negative activity on their credit reports.
Source: Fox Business, “Small Debts Can Lead to Big Credit Score Problems,” Erica Sandberg, July 17, 2014