Debt Expert Q/A: I’ve Missed some Payments in the Past And Hurt My Credit. What Should I Do? – Jimmy

Q:

Today’s question comes from Jimmy.

Dear Steve,

I lead a really busy life and I’ve missed some payments just because I missed the payment dates. I had the money.

Those late payments have hurt my credit rating and lowered my credit score. I’ve looked into paying for a credit repair service and they tell me those late payments can be removed.

Is that a smart thing to do or what should I do?

Jimmy

A:

 

 

Dear Jimmy,

I’ve seen this situation many times. The credit hit you’ve taken is not the result of not having the money. It’s one of distraction. Not everyone is good at everything. I find that for some underlying reason creative types and salespeople tend to be the most financially disorganized. Apparently they just think with a different part of their brain that the CPAs do.

Without a doubt the best way to fix this problem is to get on track paying your bills and let time pass as you do that. The more consecutive on-time payments you can have, the better. That will go much further and do a better job of “repairing” your credit than paying some alleged credit repair company to do that.

Besides, it is illegal to remove accurate information from your credit report, even if that accurate information is negative.

The easy trick to not letting this happen again is to pay your bills the moment they arrive rather than waiting till they are due. It’s the out of sight out of mind issue that’s creating the problem. This is not a problem that is best solved for you by requiring more processes or procedures in your life. Just pay the bill when you get it.

Another trick I have used is to setup a recurring weekly minimum payment on your credit card that would cover your current monthly minimum due, plus some. So if your monthly minimum payment is $200, if you setup a payment through your bank of $50 per week it doesn’t hurt as much mentally to pay $50, it helps to slightly reduce the interest you will pay on the outstanding balance and if something happened and you did not get your statement then you have not missed anything. When you get the statement and you can afford to pay the balance off in full, you can send that payment, then.

Since I use my credit card for nearly every transaction for financial protection and record keeping, what I most enjoy doing to taking my average monthly charges, divide them by four and send that amount each week automatically. That way when you get the bill it has been overpaid a bit or you owe a bit. It’s much better than owing a lot and not having it pay the bill in full.

Big hug.


@GetOutOfDebtGuy

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  • http://twitter.com/innovatebig Rod Ebrahimi

    In almost all cases, “credit repair” organizations will negatively affect your credit history. If its too good to be true, it is. Hopefully, the new FTC rulings will prevent organizations from pushing these dangerous services.

  • http://twitter.com/innovatebig Rod Ebrahimi

    In almost all cases, “credit repair” organizations will negatively affect your credit history. If its too good to be true, it is. Hopefully, the new FTC rulings will prevent organizations from pushing these dangerous services.