With the rising cost of living and your busy schedule, there are indeed times that you end up missing payments on your bills, credit cards, car loan dues and even mortgage dues. If you are not careful, you will end up repeatedly paying late payments, which in the long run can be quite considerable. In addition to wasting money for something that could be avoided in the first place, you should know that late payments can also affect your credit score in a bad way.
Late payments are usually recorded on your accounts and they are considered as important factors in assessing your financial credibility. If you would apply for a loan re-structuring or try to avail of lower interest rates, your application would probably be rejected. Worse, repeated late payments can cost you several credit scores and you would be inconvenienced for a long time unless you do something about these late payments.
Avoiding late payments is actually simple especially if there are no financial issues involved. Here are three ways that you can effectively avoid late payments.
Organize Bill Payments
If you are an extremely busy person and often make late payments on everything, you should start organizing your financial life. For starters, set aside one day of the week or every two weeks to do your accounting. You should make sure that you are not distracted by anything or anyone in order to calculate everything accurately and you do not make any mistakes. Check the due dates for each bill and make sure that you find one or two days in a month that would not cause you to make any more late payments. Stick to this schedule and you will be amazed of its effectivity.
Enroll in Payment Facilities
If for some reason, you still did not manage to organize your bill payments and you are still making late payments then you should enroll in payment facilities offered by your local bank. These payment facilities will automatically deduct from your account the exact amount of your bills for each month. It is a hassle-free and worry-free way to avoiding late payments. Unfortunately, not all banks are partners with the companies you have accounts with. But at least you can make arrangements with those that are and minimize the burden of keeping track of all of them.
Ask for Help
If worse comes to worst, you should ask for help. Ask your partner to help you out by reminding you when the bills are due. You can also try to work out a schedule where your partner or friend can help you sort out all bills that need to be paid so that you will not forget anything. If you are both comfortable with it, you can also ask your partner or friend to actually write out the checks and all you have to do is sign them. This way, you do not make any more late payments and improve credit score.
A good credit score will open a whole new world of privileges. You can own a real estate property; have high credit limits on credit cards and purchase vehicles even with just a small down payment. All these are possible as long as you maintain a good credit score. But what if you have had some bad financial judgments in the past that resulted to delinquencies and collection accounts?
Collection accounts are actually uncollected debts sold by your creditors to collection agencies in order to declare them as losses. These collection agencies obtain collection accounts but pay only a small portion of the original amount. Because they already paid for the debt collection, these collection agencies will try to employ scare tactics as well as other illegal tactics in order to receive payment fro these collection accounts.
Having collection account certainly translates to bad credit but it does not mean that you have to suffer needlessly. It is always the responsible thing to do to pay unpaid debts especially since they have a way of surfacing after some time. If you finally have enough money to pay these collection accounts in full then you should do so immediately. On the other hand, if you want to repair your bad credit, you can still do so even if you have a tight budget. You will just need to make an arrangement with the agency handling your collection accounts. You should, of course, make sure that whatever agreement you enter into should be something that is manageable and realistic to your current financial circumstances.
Before settling these accounts, you must be able to determine whether or not you are capable of doing so. If your unpaid debts are considerable, it is time to change your spending habits in order to accommodate the new financial commitment you are about to commit to. It is also wise to consider your other financial obligation when trying to assess your financial status lest they become affected as well.
Set aside some savings for emergencies in order to avoid any delays on payment. As soon as you have established a payment schedule and are absolutely sure that you can manage paying these collection accounts, you can now speak with the collection agency. When doing so, be sure you are speaking with the person who is authorized to do transactions. It would also help if you would document every details of the agreement in order to avoid any confusion. If you want, you can demand that all future correspondence be done via email or regular mail for records purposes.
As soon as you have settled the collection account, you will find in your credit report a notation that the unpaid debt has been settled and paid in full. Although it takes seven years to remove the collection accounts from your credit report, it would surely provide you peace of mind knowing that you have settled them already.