Tip #61: Talk to lenders and creditors

Many people are hesitant to keep an open line of communication with their lenders because they are embarrassed about their financial state or because they feel unsure about the position. 

Lenders can’t read your mind, though.  They do not know that you can’t make a payment this month but will be able to make a double payment next month because of a banking error. They simply see that you have failed to make a payment - this may indicate a temporary problem or a decision on your part to default on your loan.

Without your input, your creditors have no way of knowing, and since their profits and money are at risk, they tend to take the more conservative view and even assume the worst. Keeping the lines of communication open as soon as a problem develops can help reassure your lenders and can help your creditors see that you are responsible with their money.

Talking to lenders as soon as a problem develops can be an effective way to prevent a ding on your credit score that can affect your credit score.  For example, if you are giving trouble paying your bills, you can often work out a more reasonable payment schedule. 

In most cases, you will not get a ding on your credit record if you do this because the lender will have some assurance that your financial obligations will still be met.  In fact, one of the things that most credit repair companies do is to arrange for more reasonable payment schedules.  With a simple phone call, you can do this for yourself for no charge.

Lenders want, above all, to be repaid so that their interest rates can earn them a profit.  By communicating whenever there is a problem and showing that you are willing to work hard to meet your responsibilities, you show your creditors that they will get their money and this makes lenders more willing to work with you to ensure that your credit rating is not badly affected by one missed or late payment. Speaking with your creditors can help establish a good working relationship that can help keep your credit rating in good shape.

Tip #62: Get lenders to waive late fees and charges

If you have missed some payments or made some late payments, lenders will often charge you a fee for non-payment.  This not only adds insult to injury - you have to pay more on your bills and get a ding on your credit - but also makes bills more difficult to repay since the bills are now higher.  You can phone the lender and get the charge waived in most cases, though.  This is a secret that credit repair companies have long known and is one of the first services they will perform on your behalf.  You can easily accomplish this for yourself, however, at no cost.

Lenders want to get paid, and if they think that you will pay your bill more quickly by waiving the late fee, they will most often gladly remove the fee in exchange for prompt payment.