Past Due Balances are amounts on our credit report that should be checked for accuracy. We can always dispute these amounts, but the fact is that the creditors don’t care and usually won’t respond. But it would be to your benefit to dispute the fact and get the past due balance amount removed.

A collection will also show as a past due balance and needs to be taken care of quickly. After a collection, judgment or late is paid, we need to be sure the past due balance has been removed and reflects a $0 amount.

We all can make a mistake and have a late, or go over our limit or get a loan with a finance company. The challenge comes in when we have a combination of problems. This can be very devastating to our credit scores and cause us to have problems for 7, 10 or more years. Let’s talk about a few of these combinations.

Let’s say, we lose our job and run out of money. We start getting late on our payments, we get a loan with a finance company, we get a late on the new account with the finance company, get a collection, get a judgments on the collection and then go into bankruptcy. We have just compounded our bad debt in 6 different ways and our scores are now in the toilet. OK, maybe not that bad, but in the low 500’s anyway. To get into the 400’s or 300’s we would have to have multiple accounts in this scenario and get multiple collections, multiple judgments and lots and lots of multiple lates.

You can have a slip up and have a late payment on your account and it will cost your credit score points. But when you have a late payment that goes on for months, you are in real trouble of losing a lot of points, up to a hundred or more. This is very serious with the credit bureaus and shows irresponsibility. It will show up on your credit report as a 60-day, 90-day, 120 day late. Sometimes this is caused by the creditor not sending you a statement and you saying, “Well, if they won’t send me a statement then I guess I don’t have to pay.” or we forget, or… well, you get the picture, the responsibility is yours to pay the bill, even if you don’t get the statement. Keep a record of your bills and when they are supposed to be paid and put them on a calendar. If you don’t get the statement, call them up and check your address. There are lots of reasons why the statement didn’t get to you. You could have moved, the mail could have been stolen, the company just didn’t print it out, or they lost your address, what ever… it’s still your responsibility to make the payment… on time!

Relatively the same thing as a Consumer Credit Counseling Company in that they take your money and pay the bills for you, but pull out their fee before any money is given to the creditors. With a little patience, self-control and thought, you can do this yourself and the money that would go to them will pay more to your creditor instead of in their pockets. Another challenge becoming more and more prevalent are the scam companies that will take your money and then run. They start out ok and pay your bills on time until they have enough customers sending them money, they collect it for a few months without paying anyone’s bills then run with all the cash, usually in the millions of dollars.

There are a few legitimate companies out there, but they require you to get a loan to consolidate your bills, rather than take your money from you.