While it is not uncommon to occasionally pay a bill late, this is not a healthy financial habit to get into. Over time, your credit record can be affected, and overdue balances may become subject to debt collection. Here are five ways to maintain a solid financial standing and keep those debt collectors away.
1. Pay bills on time.
Late or missed payments on credit accounts is one of the leading reasons for debt collectors to get involved. Keep an eye on payment due-dates and set reminders to your smart phone or calendar. Some people prefer paying bills online because it is easier and faster, and they can receive automatic email reminders in advance.
2. Don’t use excessive credit.
Using credit cards or revolving accounts excessively or exclusively can enable consumers to rack up more debt that they are able to manage. As a result, payments can lag behind or creditors may receive only partial payments, which in turn may activate an aggressive debt collection Toronto service. Keep track of credit spending and limit it to essentials. Maintain a savings account for emergencies to avoid unplanned credit spending.
3. Shop for low interest rates.
To help keep monthly payments manageable and thus avoid missed or late payments, look for low-interest credits cards, especially those with smaller monthly payments. This will help to keep payments on track without being late or going unpaid. A credit account in good standing will not be turned over to formal debt collector services.
4. Report financial exigencies.
If a financial emergency should occur that prevents you from making timely credit payments, notice the creditor and work out a more flexible payment schedule. Most are willing to work with you to provide extensions or delayed payments while maintaining your credit rating, especially if you contact the creditor to report a legitimate reason for payment difficulty.
5. Monitor your credit score.
Everyone who uses credit as a payment plan has a credit score, or perhaps several, monitored by financial credit services. Equifax, Experian, and Transunion are the three leading credit monitoring agencies that track consumers’ credit scores. However, everyone should check their credit rating annually by requesting a credit report from all three services, which may be provided free of charge. Discrepancies in name, address, and credit accounts can be addressed promptly to ensure your FICO rating is up-to-date and accurate. This can help to prevent the need for professional debt collections.
Paying bills on time and maintaining a healthy credit score not only helps you avoid debt collectors, but it also keeps your credit in good standing. Consult a financial planner if you are unsure about how to manage your monthly budget to avoid debt collectors.
