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Credit recovery after late payment

k_sheep

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Well this is embarrassing.

I had a citibank credit card, thinking it was the fee free for life one I got ages ago (I think we all had it!). Turns out it wasn't fee free for that particular card, and they charged the annual fee. Now, having not used that card for months (no travel), I did not login at any stage to check the balance.

Consequently I got charged late fees and default fees and whatnot. Once I realised I paid it immediately and cancelled the card. Problem is, my credit score has nosedived from ~850 to 500. A quick google shows this will remain on my file for 5 to 7 years! Has anyone had experience in how long it takes the score to recover? Hard to believe one stupid mistake ('overdue' amount was $67!) will cause 7 years of financial misery (presuming I can't get reasonable refinance on home loans etc).

Otherwise, please use my stupidity as a warning. Check all your cards - even the ones you never use - and get rid of the excess 😭
 
Solution
If you get a form cut n pastes response the complain to
It costs them money to fix up insincere back office flick-offs.
You mentioned covid, and that is a sound reason. Good luck

ChrisMars

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Money smart claims it's 5 years.
There is a section about repair, it indicates that the credit provider could fix it if some circumstances are met. One is that they failed to notify you, which I guess could be the case if you got no email sms or snail mail? Maybe citibank can also understand it's an oversight error that has nothing to do with your repayment capacity and fix it? Either way I would contact them kindly to see what they can do.

For a homeloan, I would contact a mortgage broker to get their advise. It's their job to get you approved, they will know the impact.
 

Scr77

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I wouldn’t be concerned about it effecting property purchase. I’ve refinanced 2 properties while having a terrible score because of churning. Simply explained the reason.
 

MEL_Traveller

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Well this is embarrassing.

I had a citibank credit card, thinking it was the fee free for life one I got ages ago (I think we all had it!). Turns out it wasn't fee free for that particular card, and they charged the annual fee. Now, having not used that card for months (no travel), I did not login at any stage to check the balance.

Consequently I got charged late fees and default fees and whatnot. Once I realised I paid it immediately and cancelled the card. Problem is, my credit score has nosedived from ~850 to 500. A quick google shows this will remain on my file for 5 to 7 years! Has anyone had experience in how long it takes the score to recover? Hard to believe one stupid mistake ('overdue' amount was $67!) will cause 7 years of financial misery (presuming I can't get reasonable refinance on home loans etc).

Otherwise, please use my stupidity as a warning. Check all your cards - even the ones you never use - and get rid of the excess 😭

Did you contact the bank before payment? If a card hasn't been used, and the sole charge was the annual fee, banks are often willing to reverse the fee, or to at least waive the default from their end.
 

k_sheep

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Did you contact the bank before payment? If a card hasn't been used, and the sole charge was the annual fee, banks are often willing to reverse the fee, or to at least waive the default from their end.
I did. No dice. They managed a pro rata refund of the annual fee but that was it. I still had to pay all penalties, and later they did the credit reporting thing.

Groan.
 

MEL_Traveller

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I did. No dice. They managed a pro rata refund of the annual fee but that was it. I still had to pay all penalties, and later they did the credit reporting thing.

Groan.

That doesn't seem fair! Maybe a letter to customer service to see if they can fix the default?
 

ethernet

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I wouldn’t be concerned about it effecting property purchase. I’ve refinanced 2 properties while having a terrible score because of churning. Simply explained the reason.
Somebody needs a bashing. Churning and getting multiple quotes should have nothing to do with credit scores in the context of getting lowest price. I ditched Cwth Bank when overpayments were not the same as an offset. Oh wait, another members bank played that dirty trick too. Those stuck on variable rates are presently being done over. I saw 1.98% fixed but 3.4% comparison meaning bank fees are still out of control.
 
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