In today’s uncertain economy, it can be extremely easy for many business owners to fall in debt. Unfortunately, this will lead you to getting turned over to a collection agency, which is not only embarrassing, but it can be detrimental to your overall credit profile. Sure, most creditors will give you ample notice before turning your account over to a collections agency, but this doesn’t make the process any easier. Once you are turned over to an agency, you will receive numerous phone calls and get letters reminding you to pay your debt.
At the end of the day, it is always best to come up with some kind of arrangement, before your account gets turned over to a collection agency.
Consider Getting In A Contract.
When you come to the realization that you are not going to be able to pay back your debts, you need to immediately get into a contact with your creditor. It is true that practices change from company to company, but most creditors will turn your account over once you are 90 days behind on a payment. If you are willing to get into a contract that states you will pay back the pending amount, your creditors will be more willing to forgive your misfortunes. Just remember when lenders send accounts to collection agencies they lose money, so it is always in their best interests to work with their clients.
Pay In Full If Possible.
If you can come up with the resources to pay your creditor in full, it will without a doubt be in your best interest. Not only will this take care of your credit problems in one fell swoop, but it will ensure that your account doesn’t get passed off to some nagging collection agency. In addition to this, paying the loan off in full will help you build some trust and understanding with the lender, which could be extremely beneficial for future lending purposes.
Making Payment Arrangements.
If you have ever tried to delete collections from your credit, you already know that the whole process can be difficult and pain staking. This is why you should consider negotiating payment arrangements with any of your creditors. Just make sure that you agree on amounts that you can actually afford to pay back, so you will be able to fulfill your end of the agreement. If you don’t live up to your end of the bargain this will not only hurt your reputation, but it will end up with you getting turned over to a collection agency.
Set Up Automatic Payment Withdrawal.
With so many responsibilities on your plate, you probably forget to pay your bills from time to time. This is a common occurrence that will not only lead to a hefty late fee, but also a lower credit score. If you have difficulty remembering to pay your mortgage, car loan, utility bills and credit card payments, you should consider setting up automatic payment withdrawal.
Most companies encourage their customers to set up automatic payment withdrawal. In fact, many offer incentives to customers to activate this feature on their account.
Avoid Borrowing To Much Money.
Borrowed money definitely comes in handy for companies of all sizes. These loans allow businesses to purchase high-ticket items that they would not be able to get otherwise. However, it is crucial to monitor your borrowing activities. Limit how much you borrow and if at all possible, you should try to only purchase items that you can afford to pay cash for.
Protect Your Personal Information.
As a business owner, you probably have a high credit score. While all consumers are at risk of identity theft, people who own businesses are among the highest. Hackers know that you likely have a good credit history, so you and your business with become their primary targets. Keep your personal identifying information protected at all times. Do not share this information with others, even members of your management team. Remember, no one can be trusted when it comes to your personal information.
Minimize Your Credit Card Usage.
Credit cards offer a great means of accessing items that consumers could not afford otherwise. And, credit card companies are very willing to offer credit to businesses and consumers with a high credit score. Even though you are tempted to utilize your credit card to make purchases, it is crucial to make sure these purchases are necessary, before you swipe your card.