Imagine the anxiety of watching your credit score unexpectedly plummet after spending your entire adult life maintaining good credit.
Now suppose this credit decline blocks you from getting a mortgage on the house you planned to buy.
That’s precisely what happened in this story, and it happens to mortgage applicants all across the country with surprisingly frequency.
All too often the culprit is unpaid phone bills. In this case, his cellphone provider sent the account to a collection agency after being just more than a month late on its cancellation fee. That caused his credit score to drop like a lead pickle, approximately 80 points (out of a theoretical 900) virtually overnight.
It never should have happened that way. Collections are meant for people who can’t or don’t want to pay their debts. But sometimes, for one reason or another, people honestly don’t know they’ve missed a payment. Reputable creditors make bona fide efforts to contact debtors for payment before taking this extreme measure. That didn’t happen here.
As a mortgage broker, I see this time and again. For most borrowers, it’s just a simple oversight. But as this case shows, an unnoticed cellphone charge can spell credit-score disaster. By the way, I learned the hard way that when you cancel your account, some phone providers stop automatically billing your credit card and e-mailing you outstanding charges. How thoughtful of them……
To continue reading & find out how to avoid credit drama just like this, click here (story via Globe & Mail)
