By Ryan Velez
Nav CEO and co-founder Levi King awoke to a rather unpleasant way to start one’s morning, finding out that his personal credit score had dropped by a whopping 169 points. This is something that would shock anyone, let alone the leader of a company designed to help entrepreneurs avoid credit headaches. What was the culprit? A two-dollar late fee for a credit card that he hadn’t used in three years. While this is infuriating for anyone, King took the moment to see the lesson in the situation, and shares what this has taught him to Nav readers.
“The fee resulted from a missed $10 dollar payment for an insurance policy I forgot I purchased. Until then, the payments had been coming automatically from a checking account I forgot to close. The account ran out of funds, I was dinged for a measly two bucks, and my credit score plummeted in consequence,” King explains. Luckily for him personally and his image as a credit guru, King was able to get things straightened out, but if it can happen to someone with 20 years of experience, it can happen to anyone. Here are some of the things he took from this lesson.
For one, Levi King makes use of Nav’s free credit alerts, which instantly let him know when his credit started to plummet. Several different companies offer credit alert for situations like these, so do your research and find out what suite of services fit you best. Additionally, the only reason that this even got to the late credit bureaus is due to a banking error. The bank in question had an internal policy that they didn’t report late payments under $10. The fact that so much can stem from one simple mistake means that we have a responsibility to check our credit reports for mistakes regularly, to try and catch these errors before they spiral into something bigger.
Autopay is a valuable tool here, as it’s important to remember that credit scoring tools weigh late payments far more than the size of said payments. In addition, financial housekeeping is also something that you won’t want to neglect. Keep an eye on your various accounts, and don’t be afraid to close ones that aren’t being used. The less dead weight you have, the less likely it is for something to slip through your fingertips.