Late Payments - What to Do If You Cannot Pay Your Bills on Time
Do you realize that late payments can negatively affect your credit score? When you don't pay off your bill on time, you are effectively letting creditors know that you are not reliable and that they should not put as much trust in you as they would someone who consistently makes their payments on time. If you can, the best thing to do is avoid paying late at all costs. But what if you cannot avoid them? How Late Payments Affect Your Credit It depends on how exactly how late the payment is made. In general, if you are under 30 days late in making your payment it will not affect your credit score. You will probably be charged a late fee, but nothing will show up on your credit report. If you are 60 days late, many creditors will treat you just the same as if you made a payment 30 days late, but some will report it to the credit bureaus. You should find out if your creditor(s) file a report at the 30-, 60-, or 90-day marker. Once you make a payment 90 days late, things get a bit trickier. At this point, a red flag is raised on your credit statement that no creditor will ignore. In fact, many creditors will look at 90-day late payments in the same light that they would look at a foreclosure, bankruptcy, or repossession. Beyond the 120-day late payment your debt will be written off as a "bad debt" and sold to a third party debt collection agency. Your creditor will report this nonpayment to credit reporting agencies and they will mark it as a "charge off". This negative mark will lower your credit score even further and will stay on your credit report for 7 years. What if you have not Paid Your Bill on Time? Well, if you unfortunately have not paid your bills on time and have found them recorded on your credit statement, you should first call your creditor(s) and ask to have the late payments stricken from your credit report. The best thing you can do is be nice, tell a story about what landed you in the predicament in which you were unable to make your payment on time, and ask them to take it off your record. The worst they can do is say "no." If your belated payments were a one-time thing, your chances are good that the marks against you may be erased. On the other hand, if paying late was a constant problem for you, you will have a harder time getting a creditor to remove it from your credit report. If you are unable to make payments on time, talk to your creditor and ask them if there is anything they can do about it. Even if they say "no," it is far more beneficial for you if you open lines of communication with your creditors. As they will likely want to give you a bit of leeway you can work out a mutually acceptable arrangement with them.
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