subject: Being On Time The Key Factor For A Good Credit Score [print this page] Punctuality is a virtue we must all strive to achieve. However, when it comes to maintaining a good credit score, punctuality is even more important as it is one of the key factors that would determine your overall score. Being on time with your repayment schedule for any loan you may have taken will be the single most important factor on whether you have a high score or a poor credit score.
A lot of people are usually under the misconception that if they borrow a high amount or borrow often, they will end up with a bad credit score. The truth though, is that it is not the number of times you borrow that affects your score, its your repayment schedule that is actually being considered when calculating the overall score. For example, if you have borrowed money from one or more sources and have been able to meet each and every repayment condition without any delays whatsoever, you will have a high credit score. At the same time, if you have borrowed even a miniscule amount from a lender but have ended up defaulting on any of the payments, your score is immediately affected negatively. Even if you have repaid the amount but were delayed for a certain period of time, your score takes a hit. Hence being on time with your monthly payment obligations or whatever repayment schedule you have agreed to will ultimately help you in creating a great credit history.
It should be kept in mind that even falling behind for a few days affects your score. Some people wonder why they have a poor credit score even though they have been able to repay everything along with all interest and charges. However, what they fail to realize is that if they had delayed any of the scheduled payments for whatever reason, this gets reported to the credit bureaus determining your score.
This is precisely the reason why few analysts believe that it is better to take a quick short-term loan if you are about to fall behind on a payment. You can use the short-term loan to meet immediate repayment expenses and save your credit score from going down. Loans such as payday loans or auto title loans provide quick cash without considering your credit history or existing loan obligations. Using short-term loans to ensure being on time with your other loans such as mortgages, personal loans or business loans far outweigh any cons of applying for an additional loan. At the end of the day, if you are able to maintain a good credit score, then it directly reflects on your financial well-being and ability to borrow again in the future.
