I recently invited Evan Hendricks, author of "Credit Scores & Credit Reports: How the System Really Works, What You Can Do," to be my guest during an online chat. Hendricks couldn't get to all the questions (and there were a lot) so I asked him to answer a few more. Here they are:
My brother-in-law seems to think that it's okay to pay bills after they're due so long as you pay them within 30 days of the due date. Is this true?
Hendricks: His point may be that mortgage companies and many other creditors don't report you as 30 days late until 30 days past the "final" due date. For example, your mortgage payment is due Sept. 1, and there's a late fee charged after Sept. 16. Some mortgage companies only report you 30 days late if you fail to pay by Oct. 16. However, you still have to pay all those late fees, which is a waste.
Singletary: Look, your credit scores are calculated using a lot of different data found in your credit report. The biggest factor in determining your credit score is whether you pay your bills on time. Thirty-five percent of your credit score is made up of your payment history. Do you really want to risk messing up your credit because you think you know how to play this credit game? And some creditors may report you late immediately if you fail to pay by the due date. If you've got the money, just pay the bill on time.
Does it affect your credit score when you pay with a debit card that says "Visa" and rings up as a credit card?
Hendricks: Generally, no.
Singletary: Remember, when you use these new debit cards with the Visa or MasterCard logo, you are just accessing your own money. The purchase is not considered a charge.
My husband and I have been unemployed for quite some time and I am worried about my credit as a bar to employment. My creditors are not sympathetic and my credit isn't good, but it isn't because I don't want to pay my bills. I feel I'm in a Catch-22 situation. If I don't get a job, I can't pay off my debt. But my debt may preclude me from getting a job. Why is this okay?
Hendricks: I, for one, don't think it's okay. But it is a harsh reality in today's credit-score-dominated system.
Singletary: If you are searching for a job and a company wants to pull your credit reports and you know you have poor credit, 'fess up right away. Let the potential employer know you've had some financial trouble. But explain that it was because you were unemployed, not because you're some deadbeat who irresponsibly walks away from his or her debts.