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Posted in Mortgage
Does paying my mortgage late each month affect my credit score?
My mortgage payment is due on the 1st of the month with a grace period until the 16th. I usually pay closer to the 16th than the 1st so there are no late fees. What impact would it have on my credit score if I paid on the 1st?
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TheSunKing

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Paying your mortgage at the beginning of the month rather than the end of a grace period has no impact on your credit score. The purpose of a grace period is to provide you with a safety net after the due date for which the normal penalties of passing a deadline - such as a late penalty or credit score drop - is waived without consequence. Grace periods vary between lenders and banks. Consider it your "get out of jail free" card for the time being.

Just as a word of warning, the grace period is intended for occasions when unforeseen circumstances prevent you from paying on-time, so consistently using your grace period as your regular payment date is risky. If a financial emergency suddenly drains your funds, you won't have much leeway before your grace period ends and you'll have to pay the consequences. Adjust your payment schedule to pay before the deadline of the 1st so you can take advantage of the benefits of having a grace period when you really need it.

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tjarratt

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Paying your mortgage at the beginning of the month rather than the end of a grace period has no impact on your credit score. The purpose of a grace period is to provide you with a safety net after the due date for which the normal penalties of passing a deadline - such as a late penalty or credit score drop - is waived without consequence. Grace periods vary between lenders and banks. Consider it your "get out of jail free" card for the time being.

Just as a word of warning, the grace period is intended for occasions when unforeseen circumstances prevent you from paying on-time, so consistently using your grace period as your regular payment date is risky. If a financial emergency suddenly drains your funds, you won't have much leeway before your grace period ends and you'll have to pay the consequences. Adjust your payment schedule to pay before the deadline of the 1st so you can take advantage of the benefits of having a grace period when you really need it.

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Response by
tjarratt

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