We all do it, we get carried away at Christmas and spend far more than we had planned to.
With credit cards it’s very easy to just buy it and worry about it later. The problem is latter comes very soon and before you know it you get a credit card bill you cannot jump over.
Christmas cheer can soon turn into Christmas problems.
Let’s recap how easy it can be to end up with a default listed on your credit file. Let’s say you just received your credit card statement. If unpaid In thirty days from the date of the statement the credit provider can issue a demand notice. If still unpaid the credit provider can list a default thirty days after the demand letter was issued, in short a default can be listed if an account is sixty days or more in arrears. Once a default is listed it will be recorded on a credit file for five years, during this time obtaining credit can prove very difficult indeed.
Clearly, avoiding a default in the first place is best idea. When many people receive a bill they are unable to pay they tend to sweep the matter under the rug and pretend it doesn’t exist, this is the worst thing they can do. Many credit providers have automated accounts systems which mean the computer is keeping records on when accounts are paid and how far in arrears people are. When an account ticks over to more than thirty days in arrears the computer will often list a default with Veda Advantage and/or Dun and Bradstreet.
If there is no contact by the borrower during this period and the account remains unpaid a default may be recorded without the borrower even knowing it, until they try applying for finance in the future and are declined that is.
If you receive a bill that you are unable to pay or may need a little more time to pay the best thing you can do is contact the credit provider as soon as possible. Offering financial relief and assistance to consumers experiencing financial hardship is now a credit providers legal obligation and most credit providers will be helpful if they are approached in the right way.
Examples of financial relief can come in many forms including a hold on payments for a period of time, payment reductions or the removal of the interest component from an account.
In most cases a simple phone call can resolve things in favor of the borrower however many people end up with a default on their credit file due to not dealing with the situation and pretending it doesn’t exist.
At Clean Credit we talk with many people that fall into this category and once they learn that a call to the credit provider could have avoided having their credit file severely affected they are naturally regretful.
Once a default is recorded on a credit file it can be difficult and costly to have it removed so prevention is the best cure.
While we are always happy to help people restore their credit files we would much rather they avoid having a credit problem in the first place.
If you find that your Christmas cheer went just that little too far are now facing a bill that you are worried about being able to pay make sure you take the initiative and contact the credit provider, doing so may just save you from having a default recorded and having to put up with five years in credit prison.