What effect does being a slow payer have on your credit report?

Randle,

My thinking has always been that the faster you pay something off the better.  That shows intentionality and purpose.  I think that's the kind of thing that people who loan money and extend credit look for in a person.

If you are a slow payer, let the bank or credit card company know that what you are paying is what you can do for right now.  As your funds increase, make it known to them that you will pay off your debts more quickly.  Being intentional means keeping these folks in the loop.

I hope this helps.

The only affect that I c an see it having is that it will keep your debt amounts high in relation to the amount of credit you have available.  If you are on time with your payments every month, then this can actually help your credit score.

Then again, if you are able to pay off your credit card bills every month, this would have an even better effect on your credit score.

They usually want you to pay atleast the min on your credit cards. If you do that every month for a year i believe there is a green light on your credit score. Which is good, but they say you should try and pay as much as possible because it keeps your credit score high. But as long as your paying a little bit more than your min payments you should be okay.

Ed Phillips wrote:

Randle,

My thinking has always been that the faster you pay something off the better.  That shows intentionality and purpose.  I think that's the kind of thing that people who loan money and extend credit look for in a person.

If you are a slow payer, let the bank or credit card company know that what you are paying is what you can do for right now.  As your funds increase, make it known to them that you will pay off your debts more quickly.  Being intentional means keeping these folks in the loop.

I hope this helps.

I disagree.  In my humble opinion, creditors no longer are concerned with how safe the money they loan is.  I think that they are more concerned with how much money they can make off you with the money they loan - which means that they want you to pay the minimum.  The longer you pay the minimum, the longer you owe, and the more money they will make.  Again, it's just my opinion, but I don't think Banking is what it used to be.  If you think about what the teller asks you (and tries to sell to you) the next time you're making a deposit, you may begin to see that it's become a sales industry.

...That tangent aside, your credit report will indicate to creditors how deep-in you are, and it will make them consider the gamble of loaning you more so that they can be listed among the creditors that receive a check from you every month.

I don't recall seeing anything on a credit report stating if a bill was paid off early.  But late payments seem to be tracked in detail.  Pay on time and that should take care of things.

Randle,

I think you are right up to a certain point.  Banking has become more of a sales industry in recent days.  That much is correct.  It's not like it used to be.

However, any lender worth his or her salt will be looking at the credit worthiness of the person to whom a loan/credit may be given.  If greed is the primary driving factor in issuing a credit/loan  it will be THEIR loss in the long run. 

Look at what has been happening in the housing industry these days with sub-standard loans having gone out to less than credit worthy people.  Many of these people have not been able to pay back on their loans.  Those loan companies made a gamble largely based on pure greed.  Some of them are now suffering the consequences of their greed.

It's true that many (probably close to all) companies make a gamble by lending money to people who cannot pay it back.  The sub-prime lending crisis is a great example of that.  Currently, there are more bankruptcies and foreclosures than there were during the great depression.  So why haven't all the banks gone under yet?  One of the ways that many of them are staying above water is by selling off delinquent debt to collection agencies.  The agencies buy it up as an investment because they believe they can make people pay.  This option reduces the risk for the original lender. 

Another thing contributing to my bitter conclusions is the fact that many lenders are moving toward automated underwriting systems.  It's cheaper and the consumer can have a credit decision in a matter of minutes.  The downside is you no longer have an underwriter looking at each individual situation; and with a lot of loan and mortgage applications being approved on stated income, they perhaps relieve themselves of the moral responsibility of saying that they knew better.

Next time I promise the diatribe will go on my blog. 

...getting back to my original point, I think that lenders are no longer concerned with risk.  They only care that you are in debt and the more they can do to keep you in debt longer, the more money they will make from you.  I would not pay off debt slowly if I had the option to make higher payments.  Don't care about looking good to people that only want you to owe more.