FT Press Delivers - 16 expert lessons for successfully managing your personal finances : Description based on resource description page (viewed Sept. 23, 2010). - An e-burst of inspiration from the best books

FT Press Delivers

Carolyn Warren

Friends were coming for dinner, and my husband decided to be helpful by getting rid of a stack of papers I had out on the kitchen counter. Unbeknown to me, he swooped everything up and stashed it on top of the refrigerator. He thinks thats a great storage place because no one under six-feet-two can touch anything thats up there.

So we have a lovely dinner party, and three weeks later I finally get around to standing on a chair to clean on top of the refrigerator. Thats when I discover that my Visa bill has been rotting away unnoticed; and as of that very day, I am 31 days late.

Whats this? I shriek, wild-eyed with horror.

For me, the Queen of Credit, to be past the 30-day mark and get a late pay on my credit report is totally unacceptable. I fly off the chair like a bat out of you-know-where, yelling, Why did SOMEONE put my Visa bill up high where I cant see it?!

Because I cannot tolerate a ding on my credit, theres only one thing to do. Call the Visa company and ask them not to report me late.

Can they do that? some people might ask. After all, theyve read that a true and factual late payment cannot be altered. That would be lying and illegal, right?

No, wrong.

Heres the realitythe insider information I never see written up on credit bureau or government Web sites or in so-called helpful articles about credit. Late payments maynot mustbe reported to the credit reporting agencies (credit bureaus). Ill explain.

The Visa company owns my payment history information for their account. If they want to report that payment history information to all three credit bureaus, or to just one bureau, or to none at allthats their choice. There is no law that requires Visa to report my pay history to allor even to anyof the credit bureaus. And if someone at the Visa company wants to give me grace and not report my one-day late payment, that is their prerogative. Its not illegal and its not considered lying to forgive someone and call it good. It is allowed. If someone is 60 days late, they can choose to forgive it and call it good. Its up to Visa because its Visas account.

So I call up the toll-free number and ask to talk with a supervisor about my billing statement.

Ive been a customer of Visa for many years, I say. The guy looks up my record and quotes back the exact number of years.

I continue, You can see from your records that Ive never been late. I am your ideal customer. I pause for a second. Come to think of it, maybe Im not their ideal customer because I dont carry a balance from month to month, so they never make their outrageous interest profit on me. Oh well, never mind that. I go on.

I just now discovered that my Visa bill got missed this month. It was hiding on top of my refrigerator, and I didnt know it. I would like to pay today by phone, but I would like some grace and not have a late payment reported to the credit bureaus. My credit is really important to me, and I dont want my perfect credit messed up by this one-time mistake.

Just a minute, let me see, he says. So I sit and wait. When he comes back on the line, he has good news. No problem, Mrs. Warren. Well take your payment now, and we will not report the account as late.

So I make payment; and sure enough, when I check my credit report later, I confirm that no late payment was reported.

I smile. I am happy with my Visa card company. And they have just strengthened their business relationship with a valued customer.

Any time you have an uncharacteristic derogatory item on your credit report, you have an opportunity to receive grace and have it deleted. Even if its more than one day late. Even if its already been reported to the credit bureaus. Even if its a collection or charge-off.

One afternoon, I was talking with a hard-working woman who farms in rural Washington State. Much to her surprise, she received a letter out of the blue saying her collection account was past due and needed to be paid immediately. It was for some ancient catalog order, and she wasnt aware she owed money. I happened to be at her home enjoying a slice of homemade apple pie when the letter came, so I coached her on what to do; less than 30 minutes later, the collection account had vanished off her record. You, too, can do what she did. Heres how:

1. Call the company and say, I would like to speak with a supervisor who has the authority to make exceptions to your rules. Make sure you go a level above the customer service representatives.

2. Explain that you had no idea there was a past-due account on your record. Be friendly and charming. Explain that your credit rating is very important to you and that you are in the habit of paying everyone on time. They can look at your credit report and see this is true. Obviously, dont say this if its not true. If you have multiple accounts past due, skip this strategy and use another one.

3. Say you will be happy to pay what you owe, but first, you need to have an agreement that they will give you grace for this one-time, uncharacteristic mistake. Thats the magic phrase. Tell them you dont want your credit rating ruined over one charge-off you were not made aware of. Now let me make an important point here...

Everyone has feelings, including the supervisor youre talking to. Dont say, YOU never sent me a bill. Thats offensive and annoying and wont win you any points. This is a goodwill request, so you want to be amicable. Instead say, I know its not your fault, personally, but I never received proper notice. Someones computer must have messed up or whatever. See the difference and how the second statement is more likely to gain a goodwill agreement? If youre dealing with the collection department of the original creditor and not an outside collection agency, you can even add, I always like shopping at your store; you have the best such and such. Im surprised this payment snafu happened, but Im sure we can straighten it out now. Set yourself up as being on the same team, working out the problem together. Dont set yourself up as a pit-bull lawyer coming against them, ready to tear them apart. One woman told me she couldnt get the cooperation of her creditor to remove her late payment, and I found out later it was because she swore at the representative, so dont make that mistake.

In addition, if its a very old late payment that has been reported as being a collection or charge-off, it is very important that you dont make payment until after youve received a written confirmation that your payment will be considered paid in full, as agreed. You can get confirmation by e-mail, fax, or regular mail; but make sure you get it in writing. Otherwise, if they forget or dont bother to send you confirmation after they have your cash, youll have no proof that you paid in full per your agreement. Uncharacteristic mistakes can beand areforgiven. And why not? If a person has years of perfect pay history, why should a one-time mistake ruin their high score and their chances of getting the best financing? Its common sense and common courtesy.