Assuming you can bring your account current–congratulations then. Why congrats? That’s because you’ve been able to clear up outstanding debt. And all you have with only the least payment for the recent month.
Bringing your account current is difficult a task to complete in a hurry. But when you successfully do this, you can take a sigh of relieve. At least your creditor won’t have to be calling your phone now and then. Aside from this, there are other benefits of bringing your account current, here they are:
Once you are behind on your credit card payment, 70-80% of calls on your cell phone will be from your credit card issuer. By this they want you to pay up your outstanding balance. Such calls can disturb and cause loss of concentration at work or business. But one thing is certain. After you have paid or arranged on how to clear your debt, the incessant calls end. However, it is their job to ensure that you faithfully keep to your credit card issuance agreement.
After six months. If you seem not to make concrete arrangements about bringing your account current. Your creditor will charge off your credit card. In extremes cases, they will send you card to the collection department. Once they do this, further legal actions can be on you. If it gets to the extent where your credit card is charged off, your account will close your account. Your account will not be active again. That is even after bringing your account current.
Credit bureaus are to keep your credit record. Where your credit is due beyond 30 days, the credit bureaus get notified. This is so they can update their record and possibly include late payment on your account. Bringing your account current save your account report of all these. But, even when you pay up, your late record remains valid.
Even where you have met other criteria. If you falter in late payment in other accounts, your application for another credit card may not be granted. Hence, it is wise to keep a stellar debit card record for higher chances of new loans.
Most credit card issuers will restrict you from buying any further. This is when your due date has long gone by without payment. Yet, you can use your credit card once you have brought your account current. But this is only if your card hasn’t been charged off because of long overdue payment.
As the credit bureau keeps records of late payment on your account, once you have paid off, they will also update their record. But one thing applies. Even after you must have brought your account current, this doesn’t erase previous records. Especially previous records of late payment on your account. Such records of late payment move along with your account for at least seven years. What a long time to keep a bad credit record!
Again, as time goes on and you keep up with your credit payment timely, your credit score will rise. And after seven years, if you still maintain the good work of paying your debt on time, late payment record will fall off from your record.