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Have a top credit rating can reward you in several ways.

With Well Where excellent credit, you can benefit from lower interest rates and benefit from the best rewards credit cards.

But if you think your good credit behavior gives you more leeway to pay your credit card bills on time, think again.

“As the saying goes, the bigger you are, the stronger you fall,” said Bruce McClary, spokesperson for the National Foundation for Credit Counseling (NFCC). CNBC Select. “Those with the best credit scores can suffer major setbacks when missed payments are reported. “

Below, we take a look at high credit scores and how to prevent yours from slowing you down.

What is considered a high credit score?

Credit score ranges vary depending on the model used (FICO vs. VantageScore) and the credit Company which pulls the score (Experian, Equifax and TransUnion).

FICO scores are used in 90% of loan decisions, and these ranges are listed below, using Experian’s estimates:

  • Very poor: 300 to 579
  • Fair: 580 to 669
  • Good: 670 to 739
  • Very good: 740 to 799
  • Excellent: 800 to 850

How would a late payment affect an already high credit rating?

If you already have a high credit score, a late payment is going to have a more dramatic effect on your credit score than if your credit score was previously lower.

“Imagine a brand new car in perfect condition”, Wilson muscadin, financial coach and founder of Speakeasy Money, recount CNBC Select. “A visible scratch on the hood of this car will have a more dramatic effect on the value of this car than a scratch on a 3 year old used vehicle. This impact on the credit rating could be as high as 100 points.”

Let’s take a look at an example of how a missed or late credit card payment impacts your credit score. Below is an example of the effect that a 30 and 90 day delay missed payment by credit card a on two consumers, according to FICO data.

Current FICO® Score 9 607 793
Result of a 30-day missed payment 570-590 710-730
Total decrease in credit score for a 30 day missed payment 17-37 points 63-83 points
Result of a 90-day missed payment 560-580 660-680
Total decrease in credit score for a 90 day missed payment 27-47 points 113-133 points

As you can see above, the higher Maria’s credit score, the greater the negative effect of a missed credit card payment for 30 or 90 days on her account. Sophia already has her past behavior reflected in her lower credit score, but for Maria, adding another indicator of risk (a missed payment) is more important due to her own credit history.

When is a payment considered “overdue”?

The longer your payment is in arrears, the more your credit score will drop. It is therefore important to know when you have passed your deadline.

From your credit standpoint, a late payment is not considered missed or late until it is at least 30 days past the due date. Suppose you simply forgot to pay your bill on the due date, but make the full payment a few days later (remember, partial payments don’t count). You may be subject to a late payment fees (often up to $ 40), but it won’t be reported that late to the credit bureaus.

The impact on your credit score depends on how late this payment is and the terms of your credit card. You will likely be affected by a APR penalty, and the impact on your score could be “even more dramatic once you have 60 and 90 days past the due date,” says Muscadin.

How Can I Maintain My High Credit Score?

Paying your bills on time is one of the most important steps in achieving and maintaining a high credit score. If you don’t make your payments on time, you could have to pay late fees, a penalty interest rate, and ultimately risk damaging your credit score.

“The same goes for overuse of available credit, even when payments are made as agreed,” says McClary. “The best way to maintain an optimal credit score is to be aware of practices that could lower a score and be especially careful to avoid them. ”

Some steps you can take to avoid late payments include automating them, setting reminders, or changing a due date that works best for you.

And when it comes to keeping your overall credit score healthy and happy, McClary recommends maintaining balances below 30% of assigned value. Credit limit and avoid the urge to apply for too much credit all at once.

Once you learn how to maintain a great credit score, you can qualify for the best reward cards, like the American Express Blue Cash Preferred® Card, which earns cardholders 6% cash back at American supermarkets up to $ 6,000 per year in purchases (then 1%), 6% on some American streaming services, 3% discount American gas stations and on transit and 1% cash back on other purchases. That’s a lot of money in your wallet just to have healthy credit.

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

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