The $2 Charge That Dropped My Credit Score 169 Points

So, my personal credit score dropped a whopping 169 points the other day. I’m almost embarrassed to admit it. After all, I co-founded a company passionately devoted to teaching entrepreneurs how to avoid that kind of headache.


How did it happen? I’m glad you asked. A credit card of mine—which I hadn’t used in three years—was charged a $2 dollar late fee. Yes, you heard me correctly. $2 dollars.

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.

The good news is that I got things straightened out, but it was a pain in the neck to do so and a complete waste of time. The bad news is that if it can happen to me, someone who has spent nearly 20 years navigating the ins and outs of the credit and financing labyrinth, it can happen to anyone.




  • Thank heaven for free credit alerts. The minute my credit score started flatlining, I was informed of it.
  • A banking error led to that $2 late fee being reported to the credit bureaus, as the bank in question had an internal policy that they didn’t report late payments under $10. All of that headache stemmed from one little mishap. Check your report for mistakes regularly.
  • It sucks to forget stuff. Get your accounts in order. Close ones you don’t use. Small details, overlooked, can bite you big later on, so don’t make financial housekeeping a New Year’s resolution—do it now. Today. Five minutes ago. A massive weight will be lifted from your shoulders.
  • When it comes to late payments, credit scoring models care more about the fact that you were late than the dollar amount. Whether it’s $2 or $2,000 dollars, the impact on your credit score is negative. Set up auto-pay for all your accounts, if you haven’t already.
  • I should have logged in and checked on the credit card every month, if for no other reason than the possibility of identity theft. I would have saved myself a lot of trouble.

There you have it. The confession of a sheepish CEO. May it serve as a warning to check your credit often and keep an eye on your financials.


This article was written by guest author Levi King and originally appeared on