So, Topshop has their annual sale on, which of course I have to hit up. I spot the highly coveted Olivia Palermo bomber jacket which of course just happens to be the last one left and is in my size. I head to the register, bomber in hand, ready to take home my fashion find. As I reach for my wallet, the salesperson tells me I’ll get 15% off if I sign up for the store credit card and use it today. I’m all like, sweet I’ll take it.
I charge the $141.33 to my new store credit card, and head off into the sunset.
The next day (being the responsible adult that I am) I transfer $140.00 from my bank account onto the store credit card. I’ve got it covered right?
A few weeks later, I get a statement in the mail from the store, which I immediately throw in the trash without even opening it. In my mind, I’ve taken care of it.
Next month, the same thing happens. Repeat step 1: straight into the trash. 🗑
Later that month, I check my credit score and...WHAT!? It sucks. It’s dropped a bunch of points. Not cool. My small miscalculation of 2 late payments of $1.33 aren’t so small when it comes to impacting my score.
Damn. That jacket was cute but not that cute.
Moral of the story: don’t miss minimum payments. Ever.
It doesn’t matter if it’s a $4 minimum payment or $400, when you miss a payment (whether it’s your credit card, line of credit, or loan payment), you’re droppin’ your credit score like it's hot.
Approximately 35% of your credit score is made up of your payment history, so missing even one payment can hugely impact it. Your history of missing payments stays on your credit bureau for 6 years. But don’t worry, once you start making your minimum payments regularly, as time goes on it impacts your score less and less as you prove you can be a responsible adult.
Do you know your credit score?
Is it stellar? Does it suck?
Mogo is the first company in Canada giving you your Equifax (Canada’s largest credit bureau) credit score for free, without affecting your credit, updated on a monthly basis.
Chantel Chapman is Mogo's Financial Fitness Coach and Credit Score Expert. She teaches you how to be an adult, and is also the host of our Adulting 101 events. With over a decade’s experience as a mortgage broker, Chantel recognized a need for financial education with many of her first-time homebuyers, so she began creating custom content to help guide them. Chantel is the founder of Holler For Your Dollar, a consulting firm that jump-starts anyone who’s ready to dive into the world of Adulting or entrepreneurship. Her role at Mogo puts her skills to use creating and teaching digestible, educational financial literacy content geared to millennials and daring entrepreneurs.