Do credit card companies report late payments?

Yes! Credit card companies most definitely report late payments to the major credit bureaus, Equifax, Experian, and TransUnion. Reports begin when a payment is 30 days late and continue until an account is caught up and current.

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Small, local credit bureaus, have all but been replaced by the nearly instantaneous web services offered by the big three agencies listed above. The majority of card issuers report to all three; however, some creditors may report to only one or two of the bureaus.

Do Americans have too many credit cards?

Americans each carry an average of 3.5 credit cards in their purses and wallets. Credit card balances have crept up right along with interest rates making it harder and harder for a family to manage their debt obligations.

Most everyone, at one time or another will fall behind on credit obligations. In a poor economy, banks and other lending institutions see sharp increases in those consumers that are behind in their payments, as well as those who have given up and defaulted on their credit obligations.

Isn’t the economy getting better?

Yes! Tighter credit qualifying and new government regulations because of the Credit Card Act of 2009, are helping people keep up with their card payments. Currently, only 3.3% of cardholders have fallen 30 days behind on their monthly payments.

The credit card default rate fell to 5.26% in August 2011. This is significantly lower than the all time high of 11.52 %, which was recorded in September 2009, according to the Fitch Ratings organization.

Recent reports cite these statistics as good news, but analysts have determined that we still have a ways to go before our sluggish economy is back on track. More information can be found in on-line publications like The Fiscal Times.

How can I help maintain my good credit?

Credit card issuers begin reporting delinquent accounts when they are 30 days behind, in other words, a full payment cycle. Many consumers make the mistake of waiting once a credit card payment is late.

They will then promise themselves to make a double payment on the next due date, instead of sending in the first payment a few days or even a couple of weeks late. This strategy often backfires for two different reasons.

First, you will incur late charges from the card issuer either way, but you will not be reported to the credit bureau for a late payment that is made prior to the end of the next billing cycle (less than 30 days). Secondly, it’s usually easier to make smaller, more frequent payments.

Use the credit card minimum payment calculator because once your minimum payment doubles, or even triples, it’s much more difficult to manage. Interest keeps compounding and if you fall far enough behind, not only does the credit bureau hear about it, but also you’re more likely to be subjected to the card company’s penalty rates and fees which just makes matters worse!

Another strategy that really does work is to negotiate with the credit card company before your account becomes seriously delinquent, and matters get out of control. If you’ve been a good customer for a number of years, banks would rather lend a hand than see another credit card default.

Card issuers are often willing to reduce minimum payments due for a specified period. They will also reduce credit card interest rates and fees on accounts that borrowers are making consistent efforts in which to keep up. On occasion, a card company will even retract a reported delinquency!

The most important thing to remember is to keep the lines of communication open with your credit card companies. If you fall behind, make a plan to catch up and then stick with it. Ignoring small credit problems now, will only lead to bigger concerns in the future.

How do I know if my credit is good?

Run a free credit report! Consumers should obtain a complete credit report on themselves each year. According to recent surveys, only 38% of Americans have seen their credit report in the past 12 months, and just 36% have checked their credit scores during the past year.

Of those who have checked their scores, more than half discovered that they had an excellent credit rating with scores above 720! Only 17% found they had only fair or poor scores lower than 620.

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