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As soon as you realize you’ve missed a payment — or that you are going to miss a payment — contact your lender. Doing so can help minimize the damage done to your credit rating by paying late (or not at all) and can help avoid collection calls.
Before you call, figure out how much you can pay and when you can pay it:
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Can you pay the amount in full but it will be late?
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Can you pay a reduced amount? When?
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Can you pay nothing for the foreseeable future?
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It’s better to pay a little on the date you say you will, rather than promise to pay more because that’s what you’d like to do. Be realistic. To figure this out, examine your income and expenses and create a spending plan.
Questions to Ask Your Lender
Before you call, identify whether the lender has charged a late fee, increased your interest rate, or changed the terms of your credit card. When you talk with your lender, acknowledge you missed a payment and offer what you can pay. Ask the lender:
- Can you waive the late fee?
- Can you restore the interest rate to the previous level?
- Can you remove other punitive charges?
The lender’s willingness to accommodate your requests will be greater if your credit payment history has been good with them. However, even if you have been late making payments before or have missed payments, it still is worth trying to negotiate different terms.
Get New Terms From Your Lender in Writing
If the lender agrees to new terms, request the changes in writing.
Once you’ve made a payment, call the lender to make sure your payment was received and credited to your account. If it wasn’t, track the payment and find out where it might be.
Avoid these common mistakes that can delay your payment:
- Mailing a payment to the wrong address.
- Making an online payment to the wrong account.
- Writing the wrong account number on your check.
- Writing a check that is returned because there’s not enough money in your checking account to cover it.
To rebuild a better credit history with each creditor, be sure you live up to any renegotiated term and make future payments on time.
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