What To Do If You Miss a Payment.
If you have ever had a late payment, you probably have a good understanding of what it can do to your credit score. In many cases, a late payment can be extremely detrimental to your credit. In fact, the better your score is, the more your credit score will be affected by a late payment. Regardless of the reason you have a late payment, there are several things you can do to help ease some or all of the pain and heartache of this mistake. Use these helpful tips to make the best decisions possible after a late payment.
Don’t Ignore It.
If you have a late payment, ignoring it is the last thing you should ever do. Understand that the longer the payment goes unpaid, the more your score is going to suffer. The best thing you can do if you have missed a payment is to pay it as soon as possible. If you don’t have the money that you need to make the payment, calling your creditor and explaining the situation is a much better alternative than ignoring it because you don’t have the funds. Sometimes creditors are willing to setup alternative payment plans or in some cases even delay a payment. You’ll never know unless you make the call.
Call Ahead of Time.
If you foresee not being able to make a payment that is coming up, the best thing to do is to call your creditor before the balance is due and explain your situation. Understand that doing this may require several phone calls and some extra work on your part, but it will most likely be worth it in the long-run. Creditors are going to prefer a heads-up, and will most likely be more lenient and forgiving if you let them know before the balance is past due.
Your Score Suffers More the Longer You Wait.
Understand that a 30, 60, 90 and 150 day late payments all affect your score differently. Obviously, the further past due you are, the more your score is going to suffer. There is a point where late payments turn into collections and even judgments which become much bigger problems. Not only will a judgement affect your score more than a late payment, but it will also take longer to be removed from your credit report.
Use Your Good History to Your Advantage.
If you happen to have an accidental late payment, but you have never had one in the past, calling your creditor and asking forgiveness should be at the top of your list. It is rare that a creditor will report a late payment before it is 30 days late, but it never hurts to make a phone call and explain the situation before it potentially gets worse. Most of the time, if you have a great history with your creditor, it won’t be a problem getting that blip removed from your account history.
Prioritize Your Late Payments.
If you know that a late payment is going to occur, simply because there isn’t enough money coming in, learn how to prioritize which items get paid first and last. For example, a late payment on your house or car is going to have an extremely different affect on your score than a power or cable bill.
Avoid a Late Payment in the Future.
The late payments that affect your score the most are the ones that are the most recent. That being said, taking all necessary precautions to avoid future late payments should be your top priority. If this requires setting up alarms, auto-pay or calendar reminders, by all means, take the time to do so.
If you are suffering from a poor credit score, due to late payments or for any other reason, give us a call at 385-419-0878 and see how we can help you! Learn how simple it is to get started improving your credit score while getting a credit education along the way that you won’t find anywhere else.