So you're looking for the best way to increase your credit score after making a late payment Well in this video I'm going to show you three steps that you can take to help increase your score after Having a late payment hit your credit report Hi everybody and welcome to my channel My name is Kai Dumont and I'm the CEO of top-shelf credit and I want to welcome you to my new youtube channel We eill be covering various topics from God to family to credit and my goal is to help you increase your credit score so that you can build wealth and I want to give you an Opportunity to get to know me in the process.

Today's video is about increasing your credit score after Having a late payment hit your credit report.

There are show notes and links in the description box below So make sure you check that out and don't forget to hit the subscribe button now Before we start talking about three steps that you can take to increase your credit score after having a late payment I want to talk a little bit about how late payments affect us I meet a lot of people and I talk to a lot of people about their finances and the main thing that I see is that most individuals are taught to run from their finances meaning they they don't address them head on and when trouble comes the first thing that they push to the side is their finances and I want to do a little bit of a mindset check here because That's actually the wrong thing to push to the side we always need to face our finances head-on and make sure that we're addressing them because when we don't we end up hurting Ourselves when we have late payments hit our credit report.

It's hurting us More than it's hurting anyone else.

I know that there's the mindset of, you know what? I don't have it right now so I'm not gonna pay in and they're just gonna have to wait and that's fine and I understand that but Understand that when you make late payments, you're hurting yourself as far as the long run is concerned so you want to try to reduce that as much as possible so that You can do whatever it is that you want to do if you want to buy a home if you want to purchase a car If you want to get a credit card, whatever your goals are, don't let your actions keep you from So number one the first thing that you can do as far as increasing your post score after having a late payment We want to revisit your budget a lot of times if you've made a late payment It's because we either don't have a budget in place or we don't have a good solid budget in place And I know sometimes that budgeting can seem a little corny and I thought this too But actually it really does help We want to know where our money is coming from where it's going how much of it has to go out how much we're saving all of those things are important when it comes to Making payments on time and it's easier to make those payments on time If you have a good solid budget in place and I tell my clients this all the time your budget is actually the most important part of Improving your credit because payment history is the largest category of your credit score payment history accounts for one hundred and ninety two point five points of your Overall credit so it's actually very important that we make those payments on time It's 35 percent of your score is the largest category And so if you have a good solid budget in place It makes it easier for you to make those payments On time because you know where your money where it's coming from and where it's going and you can plan accordingly So if you need help creating a good solid budget There is a link in the description box below to the budget class that I have all of my clients take It really does help having a budget is important number two so one thing you want to make sure that you understand is how the category regarding late payments is actually Calculated so late payments are calculated like this.

It's the total number of on-time payments Divided by the total number of payments and that's going to give you a percentage you have Different percentages hundred percent is going to be considered excellent 99 percent is going to be considered good you have 98 percent, which is fair anything below ninety seven percent is going to be considered poor in regards to the payment history portion of your credit report So let's say you only have one account On your credit report and you have this account for a year and you make one payment late So that means you have 11 on-time payments out of 12 total payment.

That's one to put you at 91.

6% which is poor because we're below that 97% if you look at that same scenario with Five total accounts reporting to your credit report and you only make one late payment That puts you at 59 on-time payments out of 60 top which is going to put you at a 98% So that 98% is considered fair as far as payment history is concerned So what that tells us is that the less amount of accounts we have a late payment is going to make a larger impact Versus if we have more accounts that late payment it softens the blow So that brings us to number three in order to rebound your score from late payments What we're going to have to do is add additional accounts to cushion that late payment kind of sandwich it if you will to soften the blow of Those late payments on your report.

So we do that by adding additional positive credit history So we're adding other accounts.

You can add a secured card or maybe an unsecured card if you're able to get approved Usually if you have recently payments, it's harder to get approved for an unsecured card So you can add a secured card You can go for an account like self lender, which is a savings account But it reports like an installment loan and they'll send you the money back after a year You can get a my jewellers card, which is it's known to help you build your credit So there's different types of accounts that you can get.

Those are just a few suggestions, but you can actually add Accounts to your credit file to help soften the blow of that late payment So ideally what we need to do in order to rebound from that late payment is add Additional credit accounts so that we can increase the percentage of on-time payments.

It's actually a misconception for people believe that the more credit you have the lower your score Institution of credit was created for you to have credit extended to you how you manage it is what either? Increases or decreases your score having credit extended to you is actually a wonderful thing and lenders don't look at it negatively The only time as they look at it negatively is when you overextended yourself Maybe you have a high debt to income ratio, or you're not managing those payments correctly And so that's really when it's going to affect you having more credit accounts.

Actually.

It's beneficial to you And that's why we're looking at adding Those accounts here so that we can offset that late payment as a bonus I do have a number for one thing you can do if you have had a late payment hit your credit report It send a goodwill letter to your creditor I just want to give you a little bit of caution here before I talk a little bit more about the goodwill letter But what letters have been around for a while Depending on who your creditor is they may or they may not be willing to do this for you Also, if you have had a lot of late payments, this probably isn't going to work for you You've had one late payment in one mistake You can send a goodwill letter to your creditor and ask them to remove that late payment in good faith Because you have been with them for X amount of time and you have made all of your payments on time and you're just asking This one time for them in good faith to remove this late payment from you if you check the description box below I will go ahead and link a goodwill letter that you can use Obviously you're going to want to edit it to fit your situation and put a little bit more information in there about you but it's a worth a try the worst that they could say is no my question of the day for you guys is What questions do you have regarding your credit or your finances? I would like to bring more content in more videos to you I will be dropping new videos every Wednesday so if you have a question or something that you would like to know about regarding your credit or your finances drop it in the comments below and I'll Sure to respond and get a video up to help you in regards to that.

I do want you Thank you so much for watching this video today.

Don't forget to Like comment and subscribe And as always you can find all of the show notes in the comment section below Talk to you soon.

Bye.