Why Talking to Your Creditors is Actually a Good Idea
If you want to tick off buying your own home, owning a car or as simple as shopping online off your bucket list, you have considered applying for a loan one way or another. Nowadays, credit is an instrument already towards achieving goals-may it is short term or long term.
That’s why good credit is a necessity today. However, missing the minimum payment on your credit card nor letting your loan go on default will cause you some serious trouble. Creditors will immediately submit a report to credit reporting agencies and you will have a record on your credit history. Just a reminder: It takes up to 7 long years for the negative reports to be removed.
Unprecedented circumstances may occur such as natural calamities resulting in loss of livelihood, death in the family, termination and many other situations that can affect your ability to pay. These are all unforeseen and as a result-YOU ARE NOT TO BLAME.
Creditors understand and experience the same situation. However, most people will usually hide from their creditors due to probably embarrassment or guilt. This behavior will result in long-term credit problems.
What you can do is communicate with your creditor and tell them honestly about the situation you are in. They can not waive your payment, but they can certainly make adjustments. If you have fallen behind in payments, be proactive.
Most of the adjustments that your creditor will be willing to make are based on your credit report history. When you communicate with them, the chance of being reported to credit report agencies is lesser than when you avoid them completely. In most cases, creditors are open to discussing some alternate payment plans partly because if you will think about it carefully, they will still lose money if you are not able to pay them back.
Suggest a realistic payment plan for both you and your creditor. Ensure that whatever alternate payment plan you have worked on is something that you can comply with. The worst thing you can do is the default on these new payment arrangements. It might appear to your creditor that you were simply stalling for time to avoid making the payment.
Take note that your creditor’s decision to report your nonpayment to credit agencies will affect you immensely. Do your best to prevent them from doing so by communicating with them and keeping up with the end of your bargain. That’s the first step towards a credit repair!