Know when and how to pay your debts and bills.

Most importantly, avoid late payments at all costs.

Easier said than done – we know. Sometimes you just can’t make your payment. But if at all possible, make your minimum payments on time. But before you do, understand what “on time” REALLY means for you:

Understand when debtors report to the credit bureaus.

Credit cards, for example, will give you a payment deadline, and they might ding you with a fee if you pay past that deadline. But guess what? They don’t report to the credit bureaus on the day your payment is due. Most debtors won’t report you to the credit bureaus until you’re at least 30 days past due on your payment. We’re not saying to always wait 29 days to make your payments, but if making your minimum payments on your various debts is problematic for you, your first step should be to understand when exactly each debtor reports to the credit bureaus, and create a timeline for paying your bills accordingly.

If you’re 30 days late, don’t be 60 or 90 days late.

If for whatever reason you don’t get your payment in before the debtor reports you as 30 days past due, don’t give up! Try to get a payment in before you’re 60 days past due, because they’ll report you to the bureaus AGAIN at 60 days, and that’s way worse. So you can imagine how much being 90 days late is for your credit score.

If you do have a “late payment” that’s been incorrectly reported…

Many debtors will let you do a payment plan.

Most utilities companies and some collections agencies, government agencies, and even credit card companies will let you do a monthly payment plan for whatever you owe them. Often they don’t require you to pay very much on a monthly basis, and sometimes it’s without interest. Regardless of the type of debt, if you think you can’t make your payment or need more time, ask about a payment plan.

(Almost) never pay the full amount of a collection

Make sure any debt you’ve paid is completely deleted from your credit report.

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