Grace Periods

Q: What is a grace period?

• For a credit card, a "grace period" is the number of days from the time your purchase is posted to the credit issuer to the date you can pay for the purchase without interest charges. Most cards have a grace period of 20 to 25 days.

• If you fail to pay your complete balance in any month, there is usually no grace period for purchases until you again pay off your balance in full. When you owe a balance, interest is charged as soon as the purchase is posted to the credit issuer.

Credit Report Scores - Computing Then

Your credit report scores are based on factors that appear in your credit reports:

• Bill payment history (Good: on time and for the full amount)
• Total outstanding debt (Good: non-mortgage loan payments less than 5% of gross income)
• Types of debt (Good: mortgage, car loans, Bad: high credit card debt)
• Length of credit history (Good: 3 or more years of on time payments)
• Credit inqueries (Bad: many rejected applications)

The Equal Credit Opportunity Act (ECOA) prohibits certain factors from being used in determining your credit report score:

• Personal details such as sex, marital status, age, race, national origin, or because you receive public assistance income
• Sources of income such as regular alimony, child support, or separate maintenance payments

The Equal Credit Opportunity Act provides actions for you to take if suspect unauthorized factors are being used to deny you credit.

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