I Joined the 800 Club

But I ruined my wife’s perfect credit :(

I was on the phone with our mortgage agent last week, talking about the term of our loan and the rate we could get.During the conversation, our agent mentioned something that surprised me. She said we didn’t really have the best credit, as I thought we do. You can imagine how much I was surprised when I heard we didn’t have the best credit, so I asked for clarification from our agent. She then forwarded me a copy of the report for our credit check with six scores in it, three for each of us. From the report, I found what she meant: My wife’s reports showed a delinquency record and it is all my fault.

As I mentioned early, I have been very careful with my credit lately and even took some steps to boost my score in anticipation of the loan application. For example, after learning from my last credit report that having too many cards with balance hurts my score, I paid off the remaining balance on one card and stopped using another two to reduce the total number of cards with balance from 6 to 3. Actually, even without doing any of these, I am confident that we will get the best rate from any lender. My wife’s credit was even better because, between the two of us, I am always the one who got new credit cards and opened new bank or broker accounts which might have resulted in credit inquiries. Besides, she only uses two cards that are jointly owned by both of us. So whenever I paid my credit card bills, her bills got paid as well. But there is one more card that she solely owns, a Kohl’s store card that she uses only once in a while, and that’s what the problem was.

That’s not a new card. Actually, I have been paying the bills for her for that card for years, but that was before I switched to receiving the statement via email. In the past, the card always sent the paper statement and whenever I received the statement in the mail, I always paid the bill right away so I didn’t forget later.  Since the card is not used regularly like any other cards, I don’t have it on my list of cards that I check at least once a month. For years, this method for this particular card has worked perfectly and I never missed any payment. Last September after we moved to Virginia, however, I saw on their website they also have the option to have electronic statement instead when updating our mailing address. I then selected to receive statements via email, just like any other cards, and forgot that I actually need the paper statement as a reminder that there’s a bill needs to be paid. And like all other notices for electronic statements, that email from Kohl’s card is sent right into a folder that I don’t pay much attention because I know what to expect. Since it’s a simple website without those functions that you usually find on a credit card website, there’s no email alert or anything to set up.

The card wasn’t used until the Thanksgiving holiday. In a late January evening, we got a call from Kohl’s that we didn’t make the payment. By that time it was already more than 30 days late. They also told me on the phone that since we were never late before, they would waive the financial charge and not report the late payment if we could pay the bill right away. I did pay the bill and no fee was charged as promised, but the late was reported anyway :(

So how much does the delinquency affect my wife’s credit score?

When I got FICO credit scores for both of us the last time in early 2009, her score was 798 vs. mine 792. And now, our scores look like this:

  • Experian Fair, Isaac Risk Model Score: Me = 806, Wife = 712;
  • Equifax Beacon Score: Me = 798, Wife = 731;
  • TransUnion Score: Me = 808, Wife = 756;

The cost of the delinquency is at least 60 points and I feel very bad about it. Guess now I can no longer claim I never had a late payment, as I did many times in the past.

BTW, I switched back to paper statement after that so I at least get a reminder to make the payment.

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This post was written by Sun You can find out more about Sun and his activities on Facebook , or follow him on Twitter .

4 Responses to “I Joined the 800 Club”

  1. JoeTaxpayer |  Mar 24, 2010 at 1:17 pm

    More than anything, the lesson I find here is that those store cards are more of a risk that they’re worth.
    If TJ max offers 5% back, and you use it all the time, OK. It’s the occasional use store cards I can do without.
    For my primary card, I have an automated payment of $100/mo, more than enough to cover the minimum, so if my full payment ever has an issue, my problem is with a month’s interest, not with penalty or late fees.

    • Sun |  Mar 24, 2010 at 9:50 pm

      It’s this irregular use of the card and payment that got me. The website only allows me to make payments and change address, but can’t set up alert or automatic payment. So I basically have to take care of everything myself manually.

  2. Moneymonk |  Mar 24, 2010 at 1:53 pm

    I have a better idea –get rid of the Kohl’s card. Just have her use debit

    • Sun |  Mar 24, 2010 at 9:51 pm

      That’s the only store card she has. I don’t think she want to give up the discount she gets, even though she only uses it once in a while.