Credit Score Fall Down And Get Hurt?

April 13th, 2011

You could easily find your credit score falling if you are not careful. And then when that happens, you may fall down yourself and get a boo boo. Credit scores are more sensitive than you know and can quickly drop.

I have written quite a bit about credit scores, collection accounts, credit inquiries, the latest credit score requirements, keeping your credit active, and how long you have to wait to get a new mortgage after going through a foreclosure or short sale. But what about simply missing a mortgage payment, perhaps due to absent-mindedness or mis-delivered mail? That’s a problem, a big problem. It will make your credit score fall more than you can imagine.

Just having one missed mortgage payment, no matter what the excuse, can knock up to 100 points off of even a stellar credit score! Imagine having a 780 credit score one day, and 680 the next. You would have been eligible for the best interest rates one day, say 5% on a mortgage, and 5.5% the next! And it affects other types of credit even more, like car loans and credit cards. And to have your credit score fully recover from something as serious as a missed mortgage payment, which many people seem to think is no big deal (it’s just one missed payment, right?), can take almost a year to as much as three years. The more time that elapses between you and a negative credit event the better, but it takes a long time for your credit score to get back to where it was. We are talking major damage folks!

Anyone with a mortgage who does not have automatic withdrawal set up out of his or her bank account is a silly goose. Save the stamp, save the hassle, get over the fear of online banking, and set up automatic withdrawal, NOW. I have been banking online as far back as I can remember, as soon as they introduced it, I signed up. I have never had my online account breached, and have never had any sort of security issue. Although I did have someone forge a check with my account number and their name on it, and try and withdraw money from my account that way. But that was old-fashioned paper fraud, not online fraud. And if an online problem happens, my bank covers it, just like your credit card company would.

I use automatic withdrawals for all major bills. And for small bills and general financial management I use a few iPad apps to track these called “Bills” combined with finance management app called “Pageonce”. Another app called “Mint” is also a good choice. I have all my finances automated so as not to miss a payment, to push myself to save, and to make sure I eat all my vegetables. I love greens…

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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