A credit score is an important number when it comes to finances, because it determines if whether or not someone can be approved for loans, credit cards, and other financial products.
A good score can help save money over time through better interest rates on loans, while a bad one can make borrowing more expensive or even impossible.
A woman in her 80s contacted CTV News after she said she paid her credit card bill, but her bank said she didn’t.
When she refused to pay the bill for the next eight months, it led to her credit score and finances being ruined.
The senior, who we will refer to as Gloria, asked us not to identify her as she is embarrassed about her situation.
Gloria said she has mobility and eyesight issues, but claimed as a former bookkeeper she was always careful paying her bills.
“I always pay my bills on time, even before the due date,” said Gloria.
She said in February of this year, she got a credit card bill for $389 and believes she paid it, but the bank said it never received the funds and kept sending the same bill month after month and adding interest.
Gloria said she was worried she would be paying the bill twice.
“Why should I put that money in their pocket? For what? If you pay it, why do you have to pay it again. I don’t understand that,” she said.
After she didn’t pay the bill for eight months, Gloria said her credit score dropped to the lowest level, her home insurance doubled, she was unable to cosign her son’s car loan, and she was denied a new credit card.
She said she didn’t know disputing the charge could cause so many problems.
“I thought they were going after me for the money. I never thought they were going to destroy my credit score.”
A good credit score can help you rent an apartment, get a loan, and qualify for lower interest rates, but late payments can lead to a lowered credit score, increased interest rates, higher late fees, difficulty getting new credit and accounts could be closed or have reduced credit limits.
“If you’re behind on a $100 payment, your credit score will take a hit and if you show a creditor you can’t pay back $100, then no one is going to loan you more money,” said Doug Hoyes, a licensed insolvency trustee with Hoyes, Michalos & Associates.
Hoyes said in the event you feel there’s an error on one of your bills, pay it first and try to settle it later.
“If you have a dispute on a bill, pay it so your credit score won’t take a hit and fight over it later, and if you win, you’ll get your money back,” said Hoyes.
After CTV News contacted her bank, it was determined Gloria in fact had missed making the credit card payment. Now she has paid the bill, but it could take as long as six years before the unpaid bill doesn’t show up on her credit score.
